GST Ready India

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Impact of GST on e-commerce and how we are helping our sellers

Jun 02, 2017

The GST council comprising of finance ministers of states and union territories and headed by finance minister Arun Jaitley convened in Srinagar last week to complete the complex task of fitting various goods and services into four tax slabs. The council decided the tax rates for 1,211 items, more than 80% of which would fall under a GST rate of 18% or below. It is good to see that prices of daily use items such as foodgrains, hair oil, toothpaste and soaps will cost less from 1st July when the GST is scheduled to be rolled out.

We are looking forward to the implementation of GST with the hope that it will bring more clarity and remove state specific rules and levies. Among many other benefits, one of the biggest advantages of GST is the removal of tax on tax. This will help reduce the overall cost of goods, helping the entire ecosystem of buyers and sellers.

In this article, I will focus on how GST will impact our sellers at various stages and what we are doing to handhold them through this entire process.

What are the major changes?

Registration: All sellers on Flipkart will have to register under GST. Even sellers whose aggregate turnover does not exceed the threshold limit will have to compulsorily register and enter their GST number on the seller dashboard. The auto-invoicing solution by Flipkart will also be made mandatory for all sellers.

Listings: Harmonized System Nomenclature (HSN) code is a globally accepted nomenclature of names and numbers to classify traded products.Tax rate applicable for a given HSN code will be used in all tax computations. As a compliance requirement, all sellers will have to enter the HSN code of all their products on the seller dashboard.

Here are a few examples of HSN Codes:

GST on eCommerce Industries

Payments: One aspect of the GST law I’m uncomfortable about is the deduction of TCS (Tax Collected at Source) while making payments to sellers for all e-commerce companies. As pointed out by Mr. Sachin Bansal, an estimated amount of Rs 400 crore per annum will be locked in the system, which will not be accessible to sellers and straight away eat into their working capital.

We are incorporating deduction of TCS in our systems along with changes in Commission calculator and Business Reports.

Order Fulfillment: There will be changes across all the different fulfillment types – Flipkart Fulfillment, Smart Fulfillment and Seller Fulfillment due to GST. From 1st July, it will be mandatory for all sellers to use auto-generated customer invoices with standard and serialized invoice numbers. Teams are working round the clock to incorporate these changes in our systems so that the transition is smooth post 30th June.

How are we educating sellers on these changes – GST Genie

At Flipkart, there is immense collaboration between various departments like tax, legal, product, business and marketing teams to understand and drive these changes for our sellers.

We have also tied up with multiple GST Suvidha Providers to assist sellers comply with all aspects of GST.

Introducing Flipkart GST Genie. We have launched this program to handhold our sellers through the entire process and make this transition as simple as possible. Just like a Genie, this program is alleviating concerns of our sellers around GST.

Here’s what we are doing:

Content Creation. We were very sure about two things in the planning stage of the content creation. It had to be multi-lingual and smartly segmented for better understanding. We started off by creating content on Basics of GST, where we gave an overview of how GST will affect the nation and what advantages this law will bring to the country. Then, we created e-commerce specific content and described how GST will affect online sellers in the country. This was launched in January and has seen good traction with more than one third of our sellers already having consumed the content.

We are now building content on the actionable items for sellers to become GST compliant on Flipkart platform. It covers how to update GSTIN on the seller dashboard, understand which HSN code corresponds to their products and other aspects.

We are educating our sellers through various channels such as:

E-mails: We have already started educating sellers through emails on how sellers need to be GST compliant. This is a very effective channel for us and we will be using it extensively in the coming months.

Seller Community and Social Media: We have a vibrant Seller Community with more than 35,000 active sellers engaging with each other. Our Facebook page – Flipkart Seller Hub has more than 26,000 followers and we are active on Twitter as well with more than 3,200 followers. We are providing news and updates on GST through all our digital channels so that sellers are well informed.

Classroom Training: We are collaborating with partners and will start conducting training sessions across the country. We are also connecting sellers with domain experts in major cities so that they can help sellers become GST compliant. We are planning to educate around thousands of sellers through this channel.The training will cover the following aspects of GST:

Basic Concepts
Impact on e-commerce industry
Flipkart specific changes

Online Tutorials: We have a very comprehensive Seller Learning Center (SLC) which covers all stages of learning for sellers. SLC is very popular self-learning tool among sellers with more than 40,000 views per week. We have created a dedicated GST Category on the SLC for sellers to get educated on their own. We will also be creating modules and quizzes on the newly launched “Smart Learn” through which sellers can learn and get certified on GST.

Webinars: The team has already started conducting webinars to train sellers on GST. More than 100 sellers have already attended these free sessions and we will increase the frequency as we get nearer to the launch day.There are 4 webinars scheduled for May.

Newsletters: Our monthly newsletter,Lighthouse, has a dedicated section on GST and all the latest news and updates around it. We have more seen more than 5000 sellers reading these newsletter on a monthly basis.

Seller Events: We are conducting seller events throughout the country from April to June to make sellers aware of all the changes they have to make due to GST. We will be covering more than 20 locations with an average audience of around 100 seller at each location.

Flipkart Group Discussions: We are regularly conducting discussions with select group of sellers to understand their pain areas around GST and solve for them. We have product owners giving live demos of their new launches and taking feedback from sellers.


Barring a few set backs like TCS for online sellers, this law will enormously promote commerce in the country by bringing uniformity in provisions and rates. Under current tax regime, there are no specific provisions for treatment of the e-commerce sector coupled with variable VAT laws of the states. All these differential treatments and confusing compliance will be removed under GST. We are looking forward to working with all the stakeholders including the Government and our sellers, and usher in a new era of growth led by our honorable Prime Minister Mr. Narendra Modi.

This article was first published on LinkedIn by Nishant Gupta

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