Apprehensive that they may lose out post the rollout of the goods and services tax (GST) from July 1, vendors on e-commerce platforms are trying to liquidate stocks estimated at around Rs 20,000crore. Market watchers say sellers are looking to clear stock lying in warehouses, as they apprehend the new tax rates and rules might result in a loss for them post July 1.
Earlier this month, the GST Council raised the limit on input tax credit to 60% from the earlier 40%; this is for goods which attract a GST of 18% or 28% without excise payment receipts. The input tax credit refund against excise paid on items which attract a tax rate lower than 18% would remain at 40% of the total GST liability.
Clearing the present stock would allow them to lower the tax burden, thus bringing down the losses.
Further, the GST council stated a 100% input tax credit against excise can be availed on high-value items above Rs 25,000 with a serial number. Compared to the rules proposed earlier, the final rules are more friendly. However, online sellers claim that despite the new rules, they will have to incur a loss if current stock is sold post July 1.
Apparel, footwear, electronic accessories, mobile accessories, apart from premium watches, women handbag, leather products, health and beauty products – are some of the categories where sellers are hoping to reduce stock.