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Fresh woes: Flipkart sellers fret over TDS refund delay
BENGALURU: A little over a week after tweaking its sellers’ network policy, India’s largest e-commerce company, Flipkart, has now courted fresh trouble by delaying,
BENGALURU: A little over a week after tweaking its sellers’ network policy, India’s largest e-commerce company, Flipkart, has now courted fresh trouble by delaying, and in some instances, refusing to refund the tax deducted at source (TDS) to its merchants.
Last month, Flipkart raised the sellers’ commission for using its platform on certain product categories.
As an operational routine, sellers deduct taxes on commission and other remittances made to Flipkart and deposit them with the income tax (I-T) department, which is then claimed on a quarterly basis from the company. While there are no well-defined standards as to when sellers can expect these refunds, it’s a common practice to receive them within a few days or weeks, on the basis of experiences with other e-commerce platforms such as Amazon and Snapdeal.
Five sellers in the Flipkart network told HT that they are having long outstanding tax refunds, and in one instance the company had plainly refused to pay the taxes the seller had paid on its behalf. The sellers who spoke on the condition of anonymity said such cases are pervasive, and the delays are as long as six months.
The exact value of such dues owed by Flipkart to its sellers could not be ascertained.
One of the sellers said his outstanding amount is around ₹12,000, while another said it was over ₹75,000. The amount might seem insignificant for a company of Flipkart’s size (with reported sales in 2014-15 in excess of ₹10,000 crore), they make considerable difference to the small sellers who run a tight ship to avoid working capital shortages. Flipkart claims it has over 90,000 sellers on its network.
HT has an email from Flipkart’ s sales support team where it has refused to refund the TD S to a seller citing delay in depositing taxes within stipulated time.
Sellers refute these claims. “They are now refusing to reimburse the TDS amount for quarter four of 2015-16 citing the reason that their last (due) date has elapsed whereas we have deposited the TDS and filed returns within the dates specified by the government. This is purely their arbitrary decision for not giving reimbursement,” the email said.
Another Flipkart seller, who also sells on Amazon and Snapdeal, said: “I know of instances where( tax) refunds from Amazon have come in six to 48 hours .”
An email reply from Flipkart said, “From mid-July, sellers will be able to claim TDS directly, by sharing the digitally-signed tax receipts. We will also handhold them to calculate the right TDS amount to be filed with the authorities, digitally signature processes and reconciliation.”
“The TDS process that has been recommended about holding some tax and paying that on behalf of the seller ... This is something that will be very difficult for us to implement,” Flipkart’s executive chairman Sachin Bansal recently said while commenting on the new TDS policy, seen as an indication that the company is aware of the working capital pressures of its sellers.
