Flipkart under preliminary tax probe for allegedly recasting marketplace fees as transport charges

Flipkart’s market fees collected from the vendors, a category for small road carriers shifting to goods transport agencies to request lower GST rates to request lower GST rates collected from the market fees collected by rejecting the billing model.

Authorities, goods and services tax intelligence (DGGI) General Directorate (DGGI) is currently resistant to complaints against Flipkart, he said.

“We will send a demonstration notification for prosecution after accumulating full evidence,” a DGGI official said. “Since e-commerce platforms are not allowed to do so, we have to get aware of every complaint.” Both refused to be defined.

Flipkart did not answer an e -mail sent on August 23rd.

After writing a Madras Supreme Court’s defender about the Minister of Flipkart about Flipkart’s invoice practices, allegations emerged. They were later emphasized in a press release published by the International Trade Investor Gunodaya Association Federation on 23 August.

Experts make it easier to connect online buyers and sellers, charging commissions from vendors, providing lists and paying payments normally 18%.

“Transportation is only aid and does not change the nature of the main supply because it does not represent the dominant element of the transaction,” a tax consultant company Dhruva Advisors’ partner of Dhruva Advisors. He said.

“If GST officials conclude that the restructuring of wages as transportation charges is deliberate, the rejection of the requested exemption, the recovery of the differential tax with interest and the implementation of penalties,” he added.

“The reorganization of basic market commissions as transportation costs is not an application seen in other e-commerce players, because commissions continue to be taxed under standard 18% GST brake,” he said.

Cloud of doubt

In accordance with GST rules, taxes can be applied in different ways when services such as online market access and delivery are combined.

In a composite supply, a service is the main element and the whole bunch is taxed at this rate. In a mixed supply where services are not naturally interconnected, the highest valid GST ratio is valid.

Mahtani said that a sudden change in order to exempt the main supply from taxation will attract the examination from GST officials. “Such a re -characterization will be under doubt, unlike the implementation and regulation so far,” he said.

In addition, the GST law, a law firm Singhania and Co. Kamal Aggarwal may consider it as auxiliary supply and wage tax valid for the main supply.

Ved Jain and Associates Ankit Jain said, “A high fee for a E -commerce platform for delivery (goods shipping agency services) and not for market services – even if the main business actually facilitates sales – Ved Jain and Associates Ankit Jain.

GST exemption for road transport is essentially to keep small truck operators carrying goods without giving a consignment grade outside the tax network. After a consignment grade, it becomes a goods transportation agency service, and GST announced to the founding partner of Primus Partners, a Delhi -based management consultancy company.

Varma, “Platform commission or other market fees to demand exemption ‘transport’ does not work. The product depends on receiving the product to the customer (such as delivery) costs are part of the value of the product and taxed with it,” he said.

According to a Redseer research report published in March, e-commerce shipments in India are expected to increase to 15-16 billion by 2029-30 by 2029-30% of a compound annual growth rate of 23-24% by 2029-30.