Challenges for E-commerce Sellers Amid GST Changes Ahead of Festive Season
As the festive season approaches, a critical period that accounts for a significant portion of annual sales for Amazon and Flipkart sellers, a cloud of uncertainty looms regarding compliance issues stemming from the recent changes to GST slabs. Sellers are expressing concerns over the potential complications these tax adjustments may introduce.
One major worry among sellers is the possibility that updated tax rates may not be reflected in the systems of e-commerce platforms promptly. Given the high volume of transactions during the festive period, discrepancies in platform invoicing could arise, impacting GST filings. Sachin Manilal Gala, a registered seller on major platforms, emphasized, “All listings on marketplaces, apps, and websites must reflect the new rates promptly. 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.”
The complexity deepens as every product sold on e-commerce platforms is linked to a specific tax code. Another seller, Chirag Haria, highlighted the challenges sellers face in updating these tax codes. He raised the topic of clarity on timing: “If the 12% tax slab is removed and products are shifted to either 5% or 18%, when should the seller update the tax code? What about sales occurring at 12 am on that day? Sellers have faced similar issues during previous tax rate changes.”
Additionally, the concern around product returns exacerbates the situation. With most platforms allowing returns within a seven-day window, consumers might choose to return items to benefit from the lower GST rates. “There could be an issue with accounting for returns. A product sold at 12% GST might get returned when the rate has decreased to 5%,” a seller noted.
Despite reaching out for clarification, queries sent to Amazon, Flipkart, Myntra, and Meesho did not receive immediate responses. As the first phase of major online sales is set to commence just before Navaratri, sellers worry that any GST cuts implemented closer to Diwali could severely impact their festive sales.
