Update: Karnataka chief minister Siddaramaiah has directed the commercial tax department to study the the laws and issues related to e-commerce and recommend necessary changes, reports The Times Of India. A finance department official told the publication that the issue is not limited to Amazon, but to all e-commerce firms and they should have more clarity on this issue in about a month. The government has also asked the tax officials to go slow on license cancellation of merchants until there is clarity and necessary changes have been made. Earlier (Sep 17): The Karnataka government's tax department has sent notices to third party merchants working with Amazon India, directing them to stop storing their products in Amazon's Bangalore fulfillment center, reports Mint citing three sources with direct knowledge of the matter. The report cites two sources to state that the government has sent license cancellation notices to more than 100 third party merchants that primarily sell electronics, apparel, books, toys and other products, thereby stopping Amazon India from selling products through its Bangalore fulfillment center. These apparently include many of the top sellers at Amazon India. An undisclosed senior tax official has however told The Economic Times that they have sent notices to about 50 merchants selling products on Amazon India's online marketplace and they will initiate the process of license cancellation after hearing them. In an emailed statement to Mint, an Amazon India spokesperson has mentioned that it is working with relevant authorities in Karnataka to resolve this issue and avoid closing its local warehousing operations in Karnataka. It pointed out…
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