The Indian Government is preparing to roll out the GST tax regime in India starting from 1st July. However, there is still an element of uncertainty about the tax structure in several sectors. Online marketplaces are one of them.

After months of discussion with the working committee appointed by the Central Board of Excise and Customs (CBEC), online platforms are yet to get a clear picture on taxation on returns. The increase in the input tax credit is a sigh of relief for both sellers and marketplaces; however, vagueness over the taxation structure for returns has become a matter of concern.

The sellers are also facing the heat as e-commerce platforms like Amazon, Flipkart, etc., have implored them to take back the stocks from the fulfillment centers to avoid additional tax burden due to the roll out of GST. This move may prove detrimental for sellers who operate only online without own space to store the stock. Therefore, they are trying to clear the stocks by offering discounts on the products or selling them to big sellers like WS-retail or Cloudtail India.

According to the information gathered from an online seller, who claimed that they need to shell out 7 percent tax from their pockets, “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, referring to selling his old stock to WS Retail and Cloudtail India, which are the largest sellers on the online marketplaces Flipkart and Amazon India, respectively.

The confusion over taxation structure on returns is not only beleaguering online marketplaces but also digital service providers like Google, Amazon web services, etc., who jointly requested Nasscom to streamline the return process.

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Abhinav Singh, a software engineer who is very much interested in social engineering. He is responsible to manage all the social media profiles of Gadgets To Use. He also has a hobby of tracking new apps and gadgets and to share them with our readers as well.

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