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09 Jun 2017

GST roll-out fear triggers massive online 'sale' by Flipkart, Amazon

GST roll-out and e-commerce players

Sellers on e-commerce sites like Amazon and Flipkart are offering huge discounts ahead of the Goods and Services Tax (GST) roll-out on 1 July.

They want to clear stocks, fearing losses post the tax regime roll-out.

Vendors are asking e-commerce players to host 'sales' to clear existing inventory.

Also, they are placing orders from manufacturers/dealers only after confirmation rather than ordering in bulk.

In context

GST roll-out and e-commerce players

Same story everywhere, says an e-seller

Sanjay Thakur, President of e-Seller Suraksha, stated: "There is no question of selling online or offline, it's the same story everywhere. No one is buying inventory and some are even selling their existing inventory at a loss. This is happening across industries and across categories."

Sellers worried about complying with GST rules


Sellers worried about complying with GST rules

Vendors can avail up to 60% input tax credit on items attracting 18-28% GST.

They can claim 100% input tax credit against excise duty for items valued over Rs. 25,000.

However, if they don't comply with GST rules, they cannot claim tax credit on older stocks.

Citing this, vendors said offering discounts on old inventory before 1 July is better than suffering losses later.

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Several roadblocks need to be cleared post-implementation: Thakur

Sanjay Thakur said it would take at least a quarter for e-sellers to comply with the GST rules.

He added e-selling is expected to become normal only around Diwali.

A representative of All India Online Vendors Association (AIOVA) said both online and offline sellers would face trouble while applying for input tax credit for older goods sold after 1 July.

AIOVA representative's statement

"No one is placing orders for new inventory since it is better to incur losses and get rid of existing inventory. It's the same scenario online as well as offline. We hope that once GST becomes active, things will go back to normal."

Alert, shoppers! Sit tight and avail massive discounts


Alert, shoppers! Sit tight and avail massive discounts

Many e-sellers dealing with lifestyle, fashion and beauty products are offering huge discounts on the remainder of their stocks.

Products from categories like furniture and apparel are being offered for sale on e-commerce platforms at discounts of up to 80%.

These discounts aren't restricted only to these categories; products from home furnishing and interior design are also being sold at very low prices.

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