Giant e-commerce marketplace Amazon is in the herd of those who are not clear of GSTs future probabilities and impact the business internally and externally both. Recently it was learned that the highly privileged seller’s program i.e. invites only Platinum Seller Program (PSP) has been suspended due to the uncertainties arising from GST.
As acknowledged by the top officials concerned with the matter, the organisation hasn’t renewed the ongoing contracts of all those top sellers which are intertwined with the programme. It clearly represents that the programme has been suspended for the uncertain time period in order to gather furthermore clarity on upcoming goods and services tax scheme.
According to an anonymous platinum reseller, “The company has conveyed to us that the renewals are on hold due to (no) clarity on GST. There will be a single tax under GST, the benefits of which will be passed on to the merchant and to the buyer in terms of pricing. Hence, Amazon is trying to understand whether there is a need for differential standards. Even the sellers are confused and do not know what margins to quote as the impact of GST is still not clear.”
As from the previous knowledge, the Platinum Seller Program (PSP) is a target based privilege programme where the sellers are quantified on the basis of sales and differently categorised metrics and after the achievement, the company takes them into the programme. All those sellers who deal in categories like smartphones, fashion, large electronics, and consumables are majorly into this program according to the statistics. While the programme benefits to the sellers in the form of lesser marketplace fees and economically logistical costing but this time it may take it hands back. As the seller’s community told that this temporary suspension of the programme will lead to the decreased volume of sales in the business of all those sellers, and the impact may go as far as 25 to 30 percent in a single month.
Another seller from the community said that “For a seller in the television and appliance category, for example, the overhead on logistics and service tax comes up to INR 3,000 for a TV set priced at INR 25,000. The benefit of being a PSP member is that the marketplace absorbs the overhead to provide prices competitive to offline stores. By bringing down the margins, the benefits are passed on to the customer.”
While on the other hand, the Amazon’s spokesperson clearly bypassed the discussion with the reply saying, “Our PSP program is ongoing. The details of our engagement with our sellers are confidential and we do not discuss them externally.”
Earlier, all the e-commerce marketplace showed some discontent regarding the tax collected at source (TCS) which was levied at 1 percent on the total sales of the seller. The major issue in this TCS clause was to hold back the 1 percent amount and submit it with the government and the practice would be taking a lot of compliance cost and time.
