With an aim to provide a level playing field for traders and retailers in the state, Gujarat government on Wednesday passed a bill to levy entry tax on goods purchased through e-commerce portals.

The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed in the state assembly in the absence of Congress MLAs, who were yesterday suspended for two days by the Speaker.

The bill amended the present Act of 2001 that did not cover e-commerce transactions, which according to the government, was adversely affecting the local traders as the goods coming in the state through such means was sold at a much cheaper rate due to non-payment of any tax.

"Due to the recent development in the field of online purchase, web-based software applications or through tele-shopping platforms, which does not attract any tax under the present Act, local businesses were adversely affected," state Finance Minister Saurabh Patel said while presenting the bill.

As per the bill, the word "importer", as specified in the present Act, now also covers those who "bring or facilitate to bring any specified goods for consumption, use or sale in Gujarat from any part of the country using online platforms." Further, such importer is now liable to collect the tax from the person (consumer) for whom the goods are brought and pay it to the government in a prescribed manner, as per the bill.

This bill was introduced after several trader bodies made representations to the state about online platforms selling "cheap" goods in the absence of a proper tax structure applicable to them.

After taking into account their demands and to provide these local businesses a level playing field, Patel had announced that he will bring a bill while presenting the state budget earlier this month.

"The state government would announce the rate of tax as well as other procedures to be followed by the importers through a separate notification," Patel added.