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Amazon runs into trouble with Karnataka government

Amazon, the world’s largest online retailer, has been prohibited by the Karnataka government from selling its electronic goods from its warehouses in the state by cancelling the licences of its 3rd party merchants that work with the local unit of the retailer.

Karnataka government has served notices to over 100 third party vendors barring them from storing electronic products in the warehouses run by Amazon in the state.

The merchants who received the notices include top sellers of Amazon Sellers Services, the Indian arm of the global retailer. Some of these merchants who stock electronic goods, books, toys and apparel also stock and sell goods for other online retailers such as SnapDeal and Flipkart in Bangalore. Amazon has been particularly affected by the move by the Karnataka tax department as it owns storehouses in the state unlike Flipkart and SnapDeal which don’t.  Amazon India’s expenses have mounted in Karnataka as it has to source products from its warehouses in Delhi and Haryana to deliver to customers in Karnataka.  

According to Amazon India representatives the company is working closely with the tax department of Karnataka to address its concerns.  

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