Online Export Import Data Search

Complete Training Video : Click Here

Wait and watch is GST buzz on marketplaces.

Date: 17-07-2017
Subject: Wait and watch is GST buzz on marketplaces
BENGALURU: A fortnight into the goods and services tax (GST) regime, sellers and online marketplaces continue to assess the impact of the new tax. While some of them have adopted a wait-and-watch policy, many others whose margins could be hit are holdings talks with brands or vendors.

The initial dip in seller numbers by 20-30% across marketplaces indicates the wait-and-watch strategy being adopted by some, on the margins their businesses are likely to make on the ecommerce platforms.

Though the feedback from different marketplaces highlights GST as a beneficial tax in the long run for the input tax credit given to sellers, there has been no revision in the margins or commissions paid by sellers to ecommerce platforms. This has seen sellers negotiating with brands and vendors they work with to ensure better margins.

"On the Flipkart platform, 95% of our top-sellers are GST compliant. Very few sellers have dropped off the marketplace and it has been business as usual with the number of active sellers in a month remaining constant on the platform," said Nishant Gupta, director of marketplace on Flipkart.

"Sellers in the categories where margins will go down are having parallel conversations with us and the brands or vendors they work with for payment. In the medium to long term, prices will reduce when the tax credit system kicks in," he added.

Flipkart on last count had little over 1lakh sellers, without disclosing the number of active sellers right now.

Paytm Mall, the ecommerce entity of Paytm, recently delisted 85,000 sellers for non-compliance with certain norms laid down by the company, though none were barred from selling for not producing GSTIN registration.

"No sellers were delisted due to noncompliance of GSTIN. We have not revised our margins or service fee post GST, though our service charge now carries a GST component," said Amit Sinha, COO of Paytm Mall.

The sellers who have dropped out of selling on the marketplaces include long-tail retailers and those running small businesses.

"Most of the sellers who have been selling from small setups have opted out of selling on ecommerce platforms due to lack of stocks. As we are the importers and wholesalers for most of our products on online platforms, we are able to absorb the new tax rates from our margins," said Shaival Gandhi, who owns Pace Sports, an entity selling sports goods, kids toys and lifestyle products across major marketplaces. He added that the increase in tax from 5% VAT to 12% under GST for a category like toys will lead to price rise in the long run, especially where retailers are selling at a margin on the marketplace.

"We have been negotiating with the brands we procure and sell from as our margin on sale for the smartphone category has come down to 1% instead of 2% we used to make earlier. GST on tablets is also high at 18%. From a marketplace's view, we will get the input tax credit on GST and hence they will not change the margins," said Sumanth Lingala, owner of Green Mobiles which retails consumer electronics online. He adds that there is also the catch of showing that input tax credit has been used to offer consumer benefits, a requirement under GST. Hence the products cannot be priced higher than before.
A spokesperson for Amazon India said the number of sellers has not changed since GST implementation. "We haven't made any changes to our commission structure. Our system identifies the destination pin code of the customer based on the delivery address and applies the relevant tax," said an Amazon India spokesperson.

Some sellers who are not a part of the marketplaces are also leaving to opt for the composition scheme, which allows businesses with turnover less than Rs 75 lakh to file returns on a quarterly basis, but must only deal with intrastate supplies and cannot avail of input tax credit. Several sellers have also stopped selling in categories which have seen a sharp rise in tax, such as watches and sports goods which now invite 28% tax.

"One of the only concerns among sellers is regarding how returns need to be filed, whether it should have state-wise summaries or just turnover. We are discussing this with the ecommerce committee and we hope it is finalised before September," an AIOVA spokesperson said.

Source: timesofindia.indiatimes.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help

What is New?

Date: 20-02-2018
DGFT Notification No. 51/2015-2020
Amendment in the Foreign Trade (Exemption from application of Rules in certain cases) Amendment Order, 2017.

Date: 19-02-2018
Notification No. 14/2018-Customs (N.T.)
Customs Tariff (Determination of Origin of Goods under the Comprehensive Economic Partnership Agreement between the Republic of India and Japan) Amendment Rules, 2018

Date: 16-02-2018
Public Notice No. 62/2015-2020
Directtives for processing of applicatin for MEIS claims under Foreign Trade Policy 2015-20

Date: 16-02-2018
Public Notice No. 61/2015-2020
Inclusion of Seaports located at Dhamra Port and Dighi Port under Para 4.37 of Hand Book of Procedures 2015-20.

Date: 15-02-2018
Public Notice No. 60/2015-2020
Amendments/Corrections in Table 2 of Appendix 3B Foreign Trade Policy 2015-20

Date: 15-02-2018
Notification No. 13/2018-Customs (N.T.)
Exchange Rates Notification No.11/2018-Custom(NT) dated 1.2.2018

Date: 15-02-2018
Notification No. 12/2018-Customs (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver.

Date: 12-02-2018
Notification No. 26/2018-Customs
seeks to further amend the notification No. 50/2017- Customs, dated the 30th June 2017 so as to reduce the Basic Customs Duty on motorcycles falling under tariff heading 8711.

Date: 06-02-2018
Notification No. 25/2018-Customs
Seeks to increase BCD tariff rate on Chana (Chickpeas), [Tariff item 0713 20 0] from 30% to 40% by invoking section 8A (1) of the Customs Tariff Act, 1975 and accordingly, the effective rate of BCD on Chana (Chickpeas), will also be 40%.

Date: 06-02-2018
Notification No. 24/2018-Customs
Seeks to increase import duty on all types of sugar under tariff head 1701, [Raw sugar, Refined or White sugar, Raw sugar if imported by bulk consumer] from the present 50% to 100% (Tariff rate) with immediate effect and without an end date.

Exim Guru Copyright © 1999-2018 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.


C/o Infodrive India
E-2, 3rd Floor, Kalkaji Main Road
New Delhi - 110019, India
Phone : 011 - 40703001