GST return policy is still confusing India’s online marketplaces

Even after waiting for a month to discuss things with the working committee appointed by the Central Board of Excise and Customs (CBEC), online marketplaces are still not clear about the final set of rules that the goods and services tax (GST) Council has announced on Saturday.

While on one hand the marketplaces and sellers are relieved because of the increase in input tax credit, there lies abundant confusion over about taxation structure for returns, even as GST is set to be rolled out in less than a month.

Sellers registered on online marketplaces Flipkart and Amazon India say that these companies have asked brands to take back their stocks from fulfilment centres since GST will be revamping the taxation structure, and they might face an additional tax liability. However, since sellers are not clear about transitional gains and losses under GST, they are forced to clear their stocks through discounts.

"Despite the input tax credit, we will have to shell out 7% of the tax from our pockets," an online seller told ET. "The brands have been supportive with whom we have exclusivity for certain online marketplaces. They will help us in billing the goods to sister entities of online marketplaces through which they can be sold," he pointed out, adding that he has sold old stock to WS Retail and Cloudtail India, largest sellers on the online marketplaces Flipkart and Amazon India, respectively.

"The finance secretary also added that for sellers who don't have an excise invoice but have a credit transfer document from manufacturer where the goods can be identified through model number, will get 100% input tax credit where value is more than Rs 25,000. In case of items attracting GST of 18% and above, the deemed credit is increased from 40 to 60%. These steps will help curb the return of consumer durables and FMCGs back to brands ahead of GST," said Sachin Menon, national head of indirect tax at KPMG India.


The GST Council has also made easier the process of filing return across industries, which has been done by letting go of a few controversial fields on the GST returns form through application programming interface.

This has been done a few weeks after digital service providers like Google, Apple and Amazon Web Services jointly petitioned Nasscom to make the process of filing returns across industries easier.

(Image source)