Once the much-awaited Goods and Services Tax (GST) is implemented on July 1, the new deadline set by the Central government, e-commerce in the country will be among the sectors most impacted by it. While it will help improve the speed of transportation and efficiency of logistics in general, it is likely to result in higher price of goods for the consumer.
Naturally, ecommerce industry – which thrives on discounts and speedy delivery – has to look out for itself. Online marketplace Flipkart, the e-commerce market leader in the country, is gearing up for GST regime with months of preparation. The Hindu Business Line has reported that Flipkart is working with sellers to absorb the higher end prices post-GST implementation.
The report quoted Anil Goteti, Head of Marketplace at Flipkart, as saying: “We are encouraging our merchants to get their businesses registered for GST. As a seller has multiple product categories listed with us, they have to find a harmonised system number to match the description on the government side and decide on the tax structure accordingly. We will give them tools for doing this seamlessly and help them with customer invoicing as well.”
Tax for each category varies according to the rates fixed by the GST Council. To provide free chartered accountant services to its sellers, Flipkart has tied up with ClearTax and Tally. They have stated that they will automate uploading of VAT and GST documents with technology. Besides, they are introducing a ‘GST Genie’ programme to provide tuition videos, webinars, and expert advice to their sellers. Flipkart has more than a lakh sellers now.
Logistics changes will be highly relevant to Flipkart, more than its rivals, as its logistics arm Ekart caters to third party e-commerce players as well as offline merchants. However, Flipkart has not yet revealed how they plan to balance the act for logistics.