Patna, Jan. 30: Online shopping may get costlier soon as the state government plans to impose taxes on online products to compensate for the loss in revenue it incurs in traditional business.

The move is likely to bring some relief to traditional traders who find their sales shrinking because of increased online business in the state. The commercial taxes department's proposal to bring e-retailers under the tax net has brought smiles on the traders' faces.

'The proposal to bring e-commerce organisations under the ambit of the tax net is actively under consideration. The move is aimed at checking the revenue loss the state incurs because of online sale of a whole lot of products,' said additional commissioner, commercial taxes department, Arun Kumar Verma.

Sources, however, said there would not be any difference on the rate of tax - be it value added tax (VAT) or entry tax - as it would be the same. For example, if a shirt attracts 13.5 per cent VAT in a showroom, it would be the same on the online sale of the product.

There would be no separate tax for online products, sources said, while adding that it was not yet clear at what point of time the department would realise the tax - at the entry point of goods into the state or at the time of delivery of the product to the consumer.

Asked whether or not the department has quantified the volume of loss it has been incurring losses from the online sale of products in the state, a senior officer, wishing anonymity, said: 'Since neither do the e-commerce businesses furnish any record/data (of sale) to the department nor does the department keep any such record, it is difficult to ascertain the volume of revenue loss on account of online sale of products. All I can say that the amount could be between Rs 100 crore and Rs 300 crore.'

City traders and industry organisations said the e-commerce business was affecting traditional business here.

'The e-commerce market in the country is estimated at around Rs 10,000 crore. So, we guess that the market in Bihar would be between Rs 500 crore and Rs 1,000 crore,' said former president and member of Bihar Chamber of Commerce and Industries P.K. Agarwal.

Ankit Kumar Singh, who owns a computer shop on SP Verma Road, said his business had been hit. 'E-commerce sites offer discounts from time to time. I don't know the economics under which they work. E-commerce purchases in Patna have picked up, my sales have been hit,' said Singh.

Businessman Satyajeet Kumar Singh, who launched an e-commerce venture recently, said Bihar was a good market for e-commerce but it was behind other states.

'The e-commerce market share in Bihar must stand at around 3 to 4 per cent of total e-commerce sales. More than 90 per cent people order products online through cash-on-delivery (COD) option. But it is limited owing to lack of logistics and infrastructure. The prepaid option has not been accepted fully. However, one cannot deny that it affects business,' he said.

Some others differed. 'Online shopping has its disadvantages too. There have been instances with me, when I ordered a T-shirt and it didn't fit me. If I don't like a product, the return option is available but it is a tedious process,' said a representative of a popular shoe store.

Customers argued that e-commerce was a thriving business. 'I have shopped online many times and never faced problems. Taxation is good but it shouldn't pinch our pockets heavily,' said Boring Road resident Rakesh Singh.