As India gears up for the festive shopping season, GST uncertainty looms over e-commerce sellers on platforms like Amazon and Flipkart. With the festive season accounting for a significant portion of annual sales, the uncertainty over slabs is creating a ripple of anxiety among sellers, The Times of India reported on September 1.
The festive period, traditionally marked by a surge in consumer spending, could be hindered by potential compliance issues this year, ToI's report (by Asmita Dey) said. Sellers worry that the new tax rates may not be integrated into the platforms' systems in time, especially given the heightened transaction volumes expected during this peak shopping phase. This delay could result in discrepancies in invoicing, impacting sellers' GST filings.
Sachin Manilal Gala, a seller active on major platforms, articulated the gravity of the situation. He emphasised the need for all listings to reflect the updated tax rates without delay.
“Billing, accounting and inventory software needs to be updated by platforms and sellers because any delay or error can lead to wrong tax filings and penalties,” Gala cautioned.
These concerns are not just theoretical; past experiences suggest that sellers often struggle to adjust to sudden tax rate changes during busy periods.
Chirag Haria, another online seller, raised a critical point regarding the timing of tax code updates. Each product sold online is assigned a specific tax code, and the transition from a 12% tax slab to either 5% or 18% poses a logistical challenge. Sellers must determine the appropriate moment to implement these changes, particularly on days when transactions are ongoing.
“If the tax changes take effect on September 22, when should sellers update the tax code? What about sales happening at midnight on that day?” Haria questioned.
Beyond the immediate concerns of invoicing and compliance, sellers are also grappling with potential complications surrounding product returns. Many platforms enforce a seven-day return policy, which could incentivise consumers to return products purchased at higher tax rates only to reorder them at reduced rates.
“There could be an issue with accounting for returns. A product sold at 12% GST might get returned when the rate reduces to 5%,” noted another seller, underscoring the challenges posed by the evolving tax landscape.
Queries sent to major platforms like Amazon, Flipkart, Myntra and Meesho elicited no response, ToI's report said.
The festive period, traditionally marked by a surge in consumer spending, could be hindered by potential compliance issues this year, ToI's report (by Asmita Dey) said. Sellers worry that the new tax rates may not be integrated into the platforms' systems in time, especially given the heightened transaction volumes expected during this peak shopping phase. This delay could result in discrepancies in invoicing, impacting sellers' GST filings.
Sachin Manilal Gala, a seller active on major platforms, articulated the gravity of the situation. He emphasised the need for all listings to reflect the updated tax rates without delay.
“Billing, accounting and inventory software needs to be updated by platforms and sellers because any delay or error can lead to wrong tax filings and penalties,” Gala cautioned.
These concerns are not just theoretical; past experiences suggest that sellers often struggle to adjust to sudden tax rate changes during busy periods.
Chirag Haria, another online seller, raised a critical point regarding the timing of tax code updates. Each product sold online is assigned a specific tax code, and the transition from a 12% tax slab to either 5% or 18% poses a logistical challenge. Sellers must determine the appropriate moment to implement these changes, particularly on days when transactions are ongoing.
“If the tax changes take effect on September 22, when should sellers update the tax code? What about sales happening at midnight on that day?” Haria questioned.
Beyond the immediate concerns of invoicing and compliance, sellers are also grappling with potential complications surrounding product returns. Many platforms enforce a seven-day return policy, which could incentivise consumers to return products purchased at higher tax rates only to reorder them at reduced rates.
“There could be an issue with accounting for returns. A product sold at 12% GST might get returned when the rate reduces to 5%,” noted another seller, underscoring the challenges posed by the evolving tax landscape.
Queries sent to major platforms like Amazon, Flipkart, Myntra and Meesho elicited no response, ToI's report said.
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