Before GST was implemented, it was widely speculated that many sellers might leave the online selling platform due to compliance issues. But according to the ecommerce giant Amazon India, GST hasn’t affected its total seller count negatively.
“We have started tracking how the sellers’ inventory in the warehouses looks. Has there been a drop? How are sales doing? All those indicators are currently looking very strong, so the transition has not really moved any sellers away from ecommerce.”
Amazon’s declaration comes at a time when many wondered that if GST would harm the online retail industry. The ecommerce biggie also disclosed that new sellers continue to enrol on the marketplace.
No sales drop either
Ecommerce leaders Flipkart and Amazon both believe that there hasn’t been any significant drop in sales due to GST. The percentage of non-compliant sellers is very less on most of the online marketplaces as the prep began much in advance.
The American etailer also believes that thanks to their high business standards, there wasn’t a drastic change.
“On ecommerce, sellers have already been compliant, because we would register every sale, so it’s just pre-GST and post-GST, nothing much has really changed,” shared Somareddy.
Deferment to the TCS has eased transition
The main area of concern for etailers was 1% TCS on vendors. Immediate implementation of TCS during the transition period from pre to post GST could have led to drop-off in sellers’ count. But the transition was made easy by deferment to the TCS as instructed by the government.
“TCS would have been a little bit of a difficulty, especially when you are transitioning from one tax regime to another where you have to learn so many things. We are very grateful to the government for having listened to the industry and giving a deferment to the TCS, because of which the transition has been easier.”
Amazon is also happy about the fact that their tax battle with Karnataka State government has come to an end with GST.
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