Sellers on Flipkart cry foul as tax invoicing rejig hits margins

The Flipkart-Myntra restructuring pushes logistics costs to sellers and already squeezes thin margins. Multiple sellers told Mint This Flipkart unjustly uses the rule of a small carrier goods and service tax (GST) to increase his own profit and cut theirs, which explains why sales figures have changed between platforms.

The property transport agency refers to businesses carrying the goods by way and giving a consignment grade. In accordance with the GST rules, the load invoiced by a GTA may be subject to a lower or even exempt tax rate.

“When a customer pays, he cuts our top line and margins while increasing theirs. La118, made a reservation La100 as 100 income and then paid Flipkart La5 for delivery. We will increase an invoice La118. Flipkart then charge us separately, let’s say La5, for load. Now Flipkart is dividing the bill – just the book LaAs 95 sales, Flipkart shows this La5 under itself. So our numbers are shrinking, they look bigger, dedi he said the best multinational company with an important e-commerce presence.

For sellers, shift means approximately 15% annually on e-commerce revenues and roughly 2% hit at the general company level. They say that the change is applied without any advice or alignment.

Different rules

“Flipkart will question why our top line and margin from the tax structure and sellers – from the tax structure and the sellers – the debtors will finally question why our sales have fallen, and this can complicate the discussions when we go to renew our credit limits, Rav said Ravi La8.5 Crore in annual sales through online platforms.

Nasıl How can the rules be different for Flipkart and Amazon? I sell on multiple platforms, but my upper line changes for the same products depending on the market. LaLast year 2.77 Crore.

The sellers said Flipkart started to implement the new billing structure in mid-June, but only sending an e-mail. MintAfter the brands start asking questions, the ratio card change in the last week of July.

The queries sent to Flipkart on October 2 did not respond until the press time.

New Rate Card, reviewed Mint, It shows that Flipkart has changed the way of billing the delivery fees. These costs, which were previously considered as separate wages, are now grouped under that “GTA fees”. On the fixed fee page, fees La48 to excess La200 is defined as GTA GTA fixed fee, including GST. Shipping ratio card, La25 for 0-0.5 kg, La78 for 1-1.5 kg and La335 for 11-12 kg. Selling claims that these plates have inflated costs compared to the actual courier rates and claim that the consistent use of GTA-related headings along the document is a deliberate restructuring.

Delhi -based International Trade Investor Federation Gunodaya Association emphasized concerns about Flipkart’s billing in a press release on 23 August.

However, experts, transport costs will no longer fly according to GST law, he said.

The amendment excludes e-commerce operators who provide or facilitate local delivery from the GTA definition according to the September 17 notification and from 22 September onwards.

“The last change in the GTA definition of GTA clearly excludes them to be treated as GTA, even if they make delivery to e-commerce operators or directly through group or common companies. This also added that it effectively makes the door on the platforms that restructure their commissions or facilitating fees.

Risk for sellers

Invoices examined by Mint Divide the invoice into more than one Flipkart group assets for a single order.

For an order, the seller’s bill showed the product at the following address. La17.718. In addition, Flipkart assets raised separate line elements – La135 as “transportation” and “credit card fee” La99 as “protection fee” and La281, all of them as “GT fees” in accordance with the goods transportation agency invoiced at 0% GST. Instead of a single consolidated invoice, the seller was divided into more than one invoice and allowed Flipkart to cross a tax -exempt bucket while the seller was cut on the top line of the seller.

A law firm Accord Juris, executive partner Alay Razvi, “large -scale ‘transport’ fees to show the artificial division of invoices, 73 and 74. Sections under the possible tax requests under the risk of re -characterization and taxable value is faced with the risk of adding.

“Inflated transportation fees will probably be seen as a colored device to avoid GST. Exemptions within the scope of GTA are narrowly designed for small carriers, not for large, technology-oriented e-commerce platforms,” he added.

This follows MintFlipkart’s previous report allegedly reorganizing market fees as shipping fees to touch the lower GST ratios designed for small carriers.

This may also risk spilling to sellers.

Pankaj Goel, a partner of CNK, a sworn accountant company, said, “The primary responsibility is listened to with the platform that publishes such bills, and the sellers may not be fully insulated.”

Walmart’s e-commerce giant’s market branch Flipkart Internet LaIn 20.493 FY25, an increase of 14% compared to the previous year, even if the losses are sharply narrowed La1.494 CRORE LaAccording to regulatory files, one year ago, 2,386 Crore. Flipkart continued to reduce losses and showed that there was a sharper focus on profitability as well as income expansion.

The company is also preparing for “reversal”-return from Singapore to India-a movement that is widely interpreted as part of an increase for a public offering (public offering).