India's two major e-commerce platforms--Amazon and Flipkart--have collectively passed on the GST rate-cut benefits worth over Rs 300 crore to customers in their respective early "festive sale" days.
Both the companies told Moneycontrol in a statement that post September 22 (when new GST rates came in effect), the two platforms took several measures to ensure that "GST reductions are passed on to customers".
"Through its marketplace platform, Flipkart has already enabled sellers to pass on over Rs 200 crores of GST benefits to its customers during the early festive sale days," Flipkart told Moneycontrol. And Amazon said that in the days of its 'Great Indian Festival', sellers were able to pass on savings of over Rs 100 crore in GST benefits across appliances, fashion, essentials, and other applicable categories.
The new goods and services tax regime, which kicked in on September 22, replaces the previous multi-tier structure with two main slabs of 5 percent and 18 percent. The biggest overhaul of the indirect tax is aimed at lowering prices of over 300 daily-use items and reduce the tax burden on common citizens.
"As a homegrown e-commerce marketplace, Flipkart has taken several communication and tech enhancement measures to ensure that the GST reductions are passed on to customers, by sensitizing seller partners and providing a simplified seller dashboard with automatic backend updates of the new GST slabs, thereby making it easier for them to adopt the changes," the company said.
Flipkart has also been promoting the price benefits through a dedicated storefront initiative called 'GST Bachat Utsav,' which highlights GST reforms-linked savings for customers. Through these steps, the e-commerce major is actively working with our sellers to ensure that the benefits of the GST reductions are "effectively translated into lower consumer prices".
On Tuesday, Moneycontrol reported that the government has sought responses from some big e-commerce players for raising prices of a few items even after GST cuts came into effect. According to a government official, an e-commerce major had advertised higher prices post GST rate cuts three days back, which was corrected later.
Amazon in response said: "As part of our commitment to supporting sellers and facilitating compliance with government reforms, Amazon has implemented mechanisms to help sellers' transition smoothly to the new GST rates effective September 22."
"Sellers remain responsible for ensuring the correct GST rates and Product Tax Codes (PTCs) are applied to their products, and Amazon has proactively supported them with tools and guidance to review and maintain accuracy across their listings. Wherever possible, Amazon has automatically updated GST rates and PTCs on sellers' listings for select product categories. We have also equipped sellers with comprehensive resources, including masterclasses on understanding nuances of GST tax codes," Amazon told Moneycontrol in their statement.
"While sellers on 'Amazon.in' continue to have complete control over product pricing, we have enabled them to conveniently pass on benefits of GST reductions to customers in applicable categories," the statement added.
Moneycontrol reported on Tuesday that Amazon and Flipkart witnessed record traffic and robust demand during their flagship sale events — Big Billion Days (TBBD) and the Great Indian Festival (GIF). A mix of GST cuts, Gen Z shoppers and high-value purchases has set the stage for what is shaping up to be the sector’s biggest festival season yet.
Online festival season sales touched Rs 60,700 crore in the first week, up 29 percent year-on-year, marking the strongest opening ever for India’s digital retail sector, according to a report by market intelligence firm Datum Intelligence.
The firm expects total festival sales to cross Rs 1.2 lakh crore this year, with more than half of that already logged in the opening week. This compares with nearly Rs 1 lakh crore in sales last year and Rs 81,000 crore in 2023.
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