Sources have stated that the rapidly growing e-commerce that has been carrying out trade transactions worth billions have not attained government recognition as a business category.
The e-commerce companies do not fall under the listed categories of company registration, trade-licence application, or tax registration with a tax identification number (TIN) under the concerned authorities.
With these conditions, taxmen face roadblocks to scrutinise their compliance with tax laws while the upstart entrepreneurs face problems in conducting business and attaining real benefits.
A category under which e-commerce companies could be registered as separate businesses has yet to be established by the Registrar of Joint Stock Companies and Firms (RJSC), City Corporations, and the National Board of Revenue (NBR).
As of right now, the e-commerce companies are taking a detour, by attaining registration as Information Technology-enabled Services (ITES).
Companies under ITES are exempt from payment of taxes until 2024 while e-commerce businesses are taxable.
During an internal survey conducted in 2020, the National Board of Revenue (NBR) has found some 650 e-commerce businesses. Of them, in excess of 200 are companies and the rest are non-companies.
There is a 5 per cent VAT on the service value of e-commerce businesses.
Association sources stated that daily deliveries of the businesses are 0.2 million with only one per cent large companies, 4.0 per cent medium-scale and 95 per cent small businesses.