Lok Sabha Question No. 4933 (UNSTARRED), answered on 2016-12-16
Subject: Online Shopping
Ministry: FINANCE
Asked by: BANSHILAL MAHTO

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 4933

TO BE ANSWERED ON FRIDAY, DECEMBER 16 2016 AGRAHAYANA 25, 1938 (SAKA)

## ONLINE SHOPPING

## 4933:  DR. BANSHILAL MAHATO:

Will the Minister of FINANCE be pleased to state:

- (a) whether online shopping registered a growth in the country;
- (b)      if so, the details thereof;
- (c )  whether the Government has proposed any guideline/set up any monitoring mechanism to check incidents of tax evasion and illegal transaction of money through online shopping;
- (d) if so, the details thereof; and
- (e)     the total revenue loss claimed by the Government as a result thereof?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SANTOSH KUMAR GANGWAR)

- (a) & (b): No such study has been conducted by the Government.
- (c)  to  (d):  Periodic  review  of  the  Government's  mechanism  for  detecting  Direct  tax  evasion  is  an  on-going process.  In  recent  times,  the  Government  has  taken  several  effective  steps,  both  by  way  of  policy-level initiatives  as  well  as  through  more  effective  enforcement  action  on  the  ground,  to  tackle  tax  evasion/black money. These steps include putting in  place  robust  legislative  and  administrative  frameworks,  systems  and processes with due focus on capacity building and integration of information and its mining through increasing use of information technology. Major initiatives taken by the Government in the recent past include -
- (i) Proactively engaging with foreign governments to facilitate and enhance the exchange of information under Double Taxation Avoidance Agreements (DTAAs)/Tax Information Exchange Agreements (TIEAs)/Multilateral Conventions.
- (ii) While focusing upon non-intrusive measures, due emphasis on enforcement measures in high impact cases with a view to prosecute the offenders at the earliest possible for credible deterrence against tax evasion/black money.
- (iii)  Initiation  of  the  information  technology  based  'Project  Insight'  by  the  Income  Tax  Department  for strengthening  the  non-intrusive  information  driven  approach  for  improving  tax  compliance  and  effective utilization of available information.
- (iv) Proactively furthering global efforts to combat tax evasion/black money, inter alia, by joining the Multilateral Competent  Authority  Agreement  in  respect  of  Automatic  Exchange  of  Information  and  having  information sharing arrangement with USA under its Foreign Account Tax Compliance Act (FATCA).
- (v) Legislative measures including amendments in the Income-tax Act, 1961.
- (e):      No  Indirect  Tax,  namely,  Customs  Duty,  Central  Exise  Duty  and  Service  Tax  is  levied  on  online shopping. Trading of goods online does not attract levy of Service Tax, as it is included in the Negative List Services  under  Section  66D  of  the  Finance  Act,  1994.  Further,  the  goods,  which  are  being  traded,  if imported/manufactured, are cleared on payment of duty of Customs/Central Excise, as the case may be, at the time of import/clearance from the factory, respectively.

Moreover, no separate data in respect of taxes collected of volume of trade from on line trade/shopping is maintained.

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