Amazon, Flipkart await govt clarity on GST reforms before finalising festive sale plans

Amazon, Flipkart await govt clarity on GST reforms before finalising festive sale plans

India’s largest online retailers are staring at an unusual dilemma just weeks before their blockbuster festive sales: launch on schedule or wait for clarity from the Goods and Services Tax (GST) Council, which meets on September 3–4. At stake is a potential revision in the 28 percent GST slab on big-ticket items such as appliances and furniture — categories that could influence consumer demand and spending during the season.

Currently, GST operates across four slabs of 5 percent, 12 percent, 18 percent and 28 percent. The Centre has proposed a simpler two-rate system of 5 percent and 18 percent, which could significantly alter pricing on higher-value products.

Platforms such as Flipkart and Amazon, whose Big Billion Days (BBD) and Great Indian Festival (GIF) typically kick off in mid-September and contribute nearly a fourth of their annual revenues, are weighing whether looming tax changes on big-ticket items could upend this year’s plans.

To avoid disruption during the crucial festive season – particularly in high-value categories, some platforms are actively lobbying the government for more clarity ahead of the meeting. Companies are keen to understand whether changes will be taken up at the upcoming Council meeting and how quickly they would be implemented.

According to sources familiar with the matter, a large e-commerce platform has been actively engaging with policymakers to seek early clarity.

“They are requesting the government to expedite the GST implementation so that it doesn’t hamper their flagship sales starting mid-September. Otherwise, they expect a 25–30 percent impact on categories such as ACs, refrigerators, and other appliances, where the 28 percent GST slab is applicable,” one of the people said, under the condition of anonymity.

To be sure, large appliances typically account for about 10 percent of overall festive sale volumes, making them a critical category for the platforms.

The uncertainty is not just weighing on platforms but also on customers. Shoppers, especially in big-ticket categories like appliances and furniture, are deferring purchases in anticipation of a possible GST cut that could make these items cheaper.

“Consumers are delaying their purchases as they expect a GST cut on big-ticket items during the festive sales,” said Satish Meena, founder of market research firm Datum Intelligence.

That delay comes amid a recovery in consumer spending. After a weak first quarter, demand has picked up steadily since March, and with many purchases now being postponed in August, analysts expect a sharp rebound once there is clarity on GST. “Demand is likely to build up strongly in the weeks ahead,” Meena noted.

Depending on both the timing of government clarity and the pace of implementation, e-commerce companies may shift their flagship sales, pushing them back from the second week of September to the third.

However, not every company is pressing for intervention. Insiders at another major platform said the firm is taking a wait-and-watch approach.

“After conducting internal consumer surveys, the conclusion was that the impact of higher GST on large appliances would be marginal and could be offset by steep festive discounts. On that basis, the company decided against approaching the government directly and instead chose to wait for the Council’s decision,” said another source in the know.

Amid the speculation, the Central Board of Indirect Taxes and Customs (CBIC) has urged stakeholders not to jump to conclusions. In a recent post on X, the regulator said decisions on GST are taken collectively by the Council and warned that premature speculation could give rise to rumours and market volatility.

The stakes are particularly high this year. A report by Datum Intelligence estimates that festive season sales in 2025 could rise by as much as 27 percent to Rs 1.2 lakh crore – up from nearly Rs 1 lakh crore in 2024 and Rs 81,000 crore in 2023 – if there is clarity on GST. Without timely clarity, growth is expected to be significantly muted, in the range of 5–7 percent.

Meena pointed out that platforms need weeks of advance planning to manage logistics, capacity, and inventory for the sales. Any delay in tax changes or uncertainty in implementation could derail those preparations.

“If orders are delayed or tax rates don’t change, customers may shift to offline channels, which are likely to match e-commerce discounts. That will impact online sales,” he said.

For now, the sector’s biggest players remain in limbo, drawing up parallel playbooks for different GST scenarios. Whether the festive season delivers on its promise may depend less on discounts and demand, and more on how quickly policymakers provide clarity.