CHENNAI: E-commerce sellers on Amazon, Flipkart, and other platforms are facing uncertainty as the government considers changes to GST slabs just weeks before the festive sales.
The proposed “GST 2.0” framework aims to simplify the structure by reducing it to two main rates — 5% and 18% — while phasing out the 12% and most of the 28% brackets. However, official notifications on categories and timelines are still awaited.
This has left sellers and marketplaces holding back on finalizing festive discounts and campaign plans. Many shoppers are also delaying big-ticket purchases, expecting lower prices if tax rates are cut.
Sellers worry about sudden adjustments to pricing, billing systems, and returns if the changes are introduced during the sales period. Electronics, appliances, and lifestyle categories are seen as the most exposed.
Despite the uncertainty, industry executives expect a demand surge once the government provides clarity.
However, since the festive season is the biggest sales period for online sellers, sudden tax changes now can disrupt pricing, promotions, and inventory planning.
Many shoppers are delaying big-ticket purchases, hoping for lower prices once GST rates are finalized.
Amazon and Flipkart are holding back on locking campaign dates and deals until official announcements are made.
Key challenges for sellers
Pricing and margins: If GST on some products falls (for example from 12% to 5% or 28% to 18%), sellers may need to quickly adjust MRPs and discounts. A mid-sale change could squeeze margins.
Catalog and billing updates: Every product listing tied to 12% or 28% will need re-mapping in billing systems and on marketplaces. Mistakes could lead to invoice errors.
Returns and refunds: Orders placed before a tax change but returned afterward could create confusion in calculating refunds and input tax credits.
Cash flow: The 1% TCS (tax collected at source) on e-commerce transactions will continue. Rate changes could still affect settlements and working capital.
Category impact: Electronics, appliances, and lifestyle products may see the most disruption since customers often wait for tax-related price drops.
What sellers need to do now
The sellers should make a list of products in the 12% and 28% brackets and prepare alternate pricing scenarios.
Update billing software and ERP systems to handle two tax profiles.
Set clear refund rules to avoid disputes if rates change mid-sale.
Use flexible promotions (like coupons) instead of fixed discounts that may become unviable.
Communicate clearly with buyers — note that prices include GST and will adjust automatically if tax rates change.
However, consumer market and retail experts says that if the government announces the new GST rates before major festivals, sellers and platforms will get only a short window to adjust. While this may create short-term pain, a simpler tax system could help in the long run.
For now, sellers are in a “wait and watch” mode. Buyers are also holding off purchases, which means that once GST clarity comes, there could be a sudden rush in orders. The winners will be those sellers who are prepared to switch quickly.