Online shopping may get costlier as Delhi slaps VAT

Retailers carrying out transactions on e-platforms such as Flipkart, Snapdeal and Amazon will now have to register with Delhi's trade and taxes department and pay state sales levies.

The move by the state tax department on Friday is likely to make major e-commerce companies more vigilant while listing the sellers on their platforms. With most e-commerce marketplaces aggressively competing with each other to attract retailers, they have tended to be lax about whether the sellers have registered for VAT or not.

One fallout of the new move could be higher prices for online products. "The retailers who are not yet registered with the government may increase the prices of their goods because they now have to mandatorily pay VAT to the government," said the founder and CEO of a leading online marketplace.