E-commerce vendors in India are going all the ways down to sell their products to the consumer at the lowest price. This is done in the wake of roll-out of the Goods and Services Tax (GST) by July 1.The eCommerce companies have a fear to incur loss after the new tax policy.
Sellers and retailers have even tried to find out the actual reason behind it by talking to the e-commerce marketplaces, like, Amazon and Flipkart to host sales and offer discount this month to get rid of existing stock. Currently, dealers and retailers are placing orders for products from manufacturers only after receiving confirmations rather than ordering in bulk and selling the stock over time, so that when they offer sales they’ll get the benefit and can purchase stocks in bulk.
Sanjay Thakur, President of e-Seller Suraksha, has mentioned that “There is no question of selling online or offline, it’s the same story everywhere. No one is buying inventory and some are even selling their existing inventory at a loss. This is happening across industries and across categories”. He further stated that “We are expecting it to take at least a quarter for vendors to get used to the new rules under GST. There are many roadblocks which need to be removed and that will happen only after implementation. We don’t expect orders to become normal until the Diwali period”.
Sellers are worried about their existing stocks because if they are unable to comply with the new GST rules immediately will mean that they will not be able to claim the tax credit on older stocks. It’s better to incur loss from old stocks rather from having it on taxes, anyhow these companies are planning to sell out the stock before 1st July, 2017.