E-Commerce and Taxation

E-commerce occurs in various forms and between various entities in the market. One among the question faced by nations is how to tax it. As the internet crosses the boundaries the main challenges are how can the basic requirements of physical presence and substantial nexus criteria of taxation can be met. The article tries to analyse the key issues in the area of e-commerce taxation. Article alarms the nation that if it is left untaxed it will give rise to a parallet economy.
Every industry contributes to the nations economic growth. The communications industry has become very significant and is promising to grow enormously in the near future. Unlike other communication media, Internet is facilitating access to knowledge bank, in competitive market and rendering services of world class standard. E-commerce offers a new way of conducting, managing and executing business transactions using modern information technology. It has redesigned the traditional mode of business. As a whole, it is a business practice that involves use of computers, computer systems or computer networks1.
E-commerce occurs in various forms and between various entities in the market . The question is how to tax it. As the Internet has crossed borders (sovereignty) how can the requirements of physical presence and substantial nexus criteria of taxation be met.2 Due to the uniqueness of e-commerce, taxation faces a number of problems. This articles tries to find out the key issues in the area of e-commerce taxation and tries to analyse the existing regime with regard to the e commerce taxation. It is also alarmed that if this is left untaxed , it will give rise to a parallel economy.
Definition of E-commerce
According to Greenstein and Ferman3 "electronic commerce (e-commerce) is defined as the use of electronic transmission medium ( telecommunication) to engage in the exchange, including buying and selling of products and services requiring transportation either physically or digitally