Amid growing popularity, online shopping is getting costlier soon for the proposed value added tax (VAT) imposed on it in the budget for fiscal 2019-20.

Customers will have to pay 7.5 percent value added tax for online shopping and purchasing goods from online shops, says the budget documents.

Online shopping received a 5 per cent VAT imposition in the previous budget of MA Muhith, but was later dropped citing reasons that it was a printing mistake.

Industry insiders said last year VAT was exempted through a clearer definition, but this time though, it is included through definition in the documents.

The 7.5 per cent VAT is too much for this emerging e-commerce sector, said Asif Ahnaf, founder director of e-Commerce Association of Bangladesh (e-CAB).

"I think online sales should not be included in Virtual Business and there should be a VAT exemption in this sector until 2024," he said.

AKM Fahim Mashroor, founder of ajkerdeal.com, one of the leading local e-commerce ventures, said this move will go against the digitisation of the country.

Currently there are about one thousand e-commerce shops in the country and annual turnover is about Tk 2,000 crore. Numbers are growing every day.