Earlier, we came to know that Amazon limited the delivery in UP for the orders worth Rs.5000 only. This was due to a very high rate of crime against the deliveryboys in UP region. Now, other etailers like Snapdeal, Flipkart etc are getting in the same row of not delivering the products in state of U.P. not due to the assaults on the delivery guys but due to the government.
Yes, Uttar Pradesh government is the reason for this chaotic barrier in sales. Reason - a new law that has mandated online buyers to file a VAT declaration along with the registration number of the vehicle which is bringing the product within the state borders (applicable for products above Rs. 5,000 only).
“Owing to these statutory restrictions imposed by the UP government, we do customer deliveries for shipments only up to Rs 5,000, which is for interstate shipments,” a Flipkart spokesperson said in an e-mail. -ET . The application of the law is a big blow to the etailers and the sellers who gets more than 60% of the sales is generated from Tier 2 and Tier 3 cities.
How would the companies like Flipkart combat this law?
The law can be worked in favour by either by following it and paying taxes and a long process OR by setting up seller base and warehouses within the state. By doing so, the state would be benifitted in two ways : First – it will get in the operational executional platform of the fast growing logistics. Second, it will give the state a pinch of revenue benefit, along with employment option to the people of the state. UP is not the largest state by the area but it surely the largest in terms of the population in India.