{"id":6760,"date":"2025-09-03T19:00:00","date_gmt":"2025-09-03T13:30:00","guid":{"rendered":"https:\/\/www.thirdeyesight.in\/?p=6760"},"modified":"2025-10-19T19:07:54","modified_gmt":"2025-10-19T13:37:54","slug":"gst-council-meets-today-what-the-overhaul-could-mean-for-e-commerce-sellers","status":"publish","type":"post","link":"https:\/\/myechoproject.com\/TES\/gst-council-meets-today-what-the-overhaul-could-mean-for-e-commerce-sellers\/","title":{"rendered":"GST Council Meets Today: What the Overhaul Could Mean for E-Commerce Sellers"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Aakriti Bansal, Medianama <br>3 September 2025 <\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Goods and Services Tax (GST) overhaul simplifies India\u2019s tax structure and lowers prices for many goods. However, for e-commerce sellers, the change arrives at the worst possible moment. Platforms and sellers must adjust billing systems, invoices, and inventory records just as the festive season begins.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The festive period drives the highest order volumes of the year, and even minor disruptions in invoicing or compliance ripple through the system. Refunds get delayed, seller\u2013platform relations strain, consumers face frustration, and penalties under GST law escalate. Moreover, the episode shows the fragility of India\u2019s e-commerce compliance infrastructure.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Larger sellers can rely on manpower and technology, but smaller businesses remain disproportionately exposed. Platforms, meanwhile, cannot act as neutral intermediaries when their invoicing systems directly control seller compliance. The question now is whether the government, platforms, and sellers can move fast enough to make structural reforms without turning them into seasonal flashpoints.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What\u2019s the News?<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The GST Council, chaired by Finance Minister Nirmala Sitharaman, is meeting today and tomorrow (September 3\u20134), according to a report by Hindustan Times, to decide on a major overhaul of India\u2019s tax system. The timing has already unsettled e-commerce. Platforms like Amazon, Flipkart, and Meesho are holding back on announcing festive sale dates, while sellers report uncertainty about how to handle inventory already billed at old rates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Shoppers are delaying big-ticket purchases such as smartphones, televisions, and appliances, creating a visible slowdown in demand. Retailers are carrying higher stock levels, waiting to recalibrate pricing once the Council clarifies the new slabs. The pause comes just before the festive sales period, which typically contributes about a quarter of annual revenues for e-commerce platforms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What the GST Reforms Are<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The government has proposed collapsing the four-tier GST structure of 5%, 12%, 18%, and 28% into two slabs of 5% and 18%. A new 40% tier would apply to luxury and sin goods, replacing the existing compensation-cess mechanism.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the Council approves, several categories will see rate changes. White goods such as washing machines, air-conditioners, smartphones, refrigerators, and televisions would move from 28% to 18%. Small petrol cars and motorcycles would also shift from 28% to 18%. Essentials including ghee, nuts, namkeen, packaged drinking water, and medical devices would drop from 12% to 5%. Everyday consumer products like toothpaste, shampoo, soap, and ready-to-eat foods would also move into the 5% bracket.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The 40% tier would target high-end cars, premium electric vehicles, tobacco, and pan masala. States have pushed back, warning of revenue losses, and discussions are underway on whether higher levies on luxury items or cess surpluses can offset the shortfall.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Implementation Challenges<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Satish Meena of Datum Intelligence, a market research firm, flagged the absence of a transition window as \u201cvery tricky.\u201d \u201cEveryone wants to make the change because this is the peak sale time,\u201d Meena explained. \u201cBut the challenge is how it will be implemented for goods already in warehouses. Once inventory has moved from the company to the warehouse under the old GST, how will you pass on the benefit to the customer?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Devangshu Dutta, chief executive of Third Eyesight, a retail consulting firm, pointed to similar risks. \u201cSellers will need to rapidly adjust pricing strategies and inventory details, keeping in mind that the festive season is upon us,\u201d Dutta explained. \u201cOne would hope that the changeover of rates doesn\u2019t create supply unpredictability in this critical season.\u201d<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Abhishek A. Rastogi, founder of Rastogi Chambers, a law firm specialising in indirect tax and regulatory matters, warned about compliance fallout.\u201cFrom a compliance perspective, the biggest challenge will be ensuring real-time alignment between product listings, tax rates, and invoices generated. Even a minor mismatch in billing, particularly during the high-volume festive season, could result in serious exposure,\u201d Rastogi said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Impact on Smaller Sellers<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Experts agreed that smaller sellers carry the heaviest burden. \u201cLarger sellers with manpower and technology will cope faster. Smaller sellers will face particular challenges,\u201d Meena noted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dutta explained why smaller businesses feel the squeeze. \u201cBusinesses of all sizes face the burden of compliance and accurate reporting, but smaller businesses feel the impact disproportionately as their management resources are far more limited. Often it is the owner-manager, the most critical human resource in a small business, whose time gets sucked into ensuring the changes go through smoothly,\u201d he said.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Moreover, Rastogi advised small sellers to act defensively. \u201cSmaller sellers must ensure they maintain proper records of their communications with platforms, raise tickets on billing mismatches, and document tax advice received. Such proactive record-keeping will protect them if litigation arises later. They should also consider contractual safeguards when signing with platforms,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Platforms Under Pressure<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Platforms also operate under strain. Meena pointed out that festive sales remain unannounced. \u201cTypically, the sales should be in the week of October 13\u201314, or the following week. That has not been announced till now because of this GST issue,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dutta argued that platforms must step in to steady sellers. \u201cSales, inventory, and return reconciliation is an ongoing issue and potential point of dissatisfaction among sellers. To avoid adding to this, e-commerce platforms need to provide enhanced seller support to smooth out the turbulence during the GST changeover,\u201d he said.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Rastogi underlined that platforms share liability. \u201cLegally, the burden to discharge GST liability lies on the seller. However, given that invoicing systems are often managed by e-commerce platforms, there is a shared responsibility to ensure the correct GST rate is applied. Any platform-level error that causes sellers to become non-compliant could become a contentious issue,\u201d he explained.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He also laid out remedies. \u201cSellers impacted due to platform-level glitches can seek remedies under contract law and indemnity clauses in their agreements with the platform. They may also explore legal recourse if non-compliance is triggered without their fault. Ultimately, disputes of this nature will test how liability is apportioned between sellers and platforms,\u201d Rastogi mentioned.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Consumer and Market Effects<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The uncertainty already shapes consumer behaviour. \u201cThere is already a decline in demand over the last two weeks as customers are delaying purchases, waiting for festive discounts,\u201d Meena observed. \u201cIf sales are pushed too close to Diwali, customers may move to offline stores where delivery is immediate and pricing on appliances can match e-commerce.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Notably, Dutta pointed out that offline businesses could benefit. \u201cSmall offline businesses that don\u2019t have GST numbers and don\u2019t need to compile GST returns may be able to quickly benefit from lower input costs and may be able to become more price competitive,\u201d he said.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Need for Government Clarity<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both Dutta and Rastogi called for immediate guidance.<strong> <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Dutta warned that reforms must not create \u201csupply unpredictability in this critical season.\u201d <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Rastogi pressed for intervention. \u201cThere is a strong case for the government to issue clarificatory circulars or transitional relief, particularly given the festive season volumes. Without such guidance, both sellers and platforms face a high risk of disputes, and the compliance ecosystem may be overburdened,\u201d he noted.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Why It Matters<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The GST reforms land as festive season spending sets the direction for the retail year. E-commerce platforms draw about a quarter of their annual revenues during this period, and sellers use these weeks to recover margins. Datum Intelligence estimates that online shoppers will spend around Rs. 1,20,000 crore in 2025, up 27% from 2024, with quick commerce taking 12% of that share. At this scale, even small invoicing or compliance errors can lock up billions of rupees in disputed sales.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reforms already shape consumer behaviour. Shoppers hold back purchases while they wait for clarity on tax rates, and platforms face pressure to adjust quickly. If festive sales move closer to Diwali, buyers may switch to offline stores that match appliance prices and provide immediate delivery.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The rollout will show whether platforms and sellers manage a nationwide tax change in the middle of their busiest season or allow it to disrupt India\u2019s largest online retail channel.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>(Published in <a href=\"https:\/\/www.medianama.com\/2025\/09\/223-gst-council-meeting-impact-ecommerce-overhaul-festive-sales\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Medianama<\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Aakriti Bansal, Medianama 3 September 2025 The Goods and Services Tax (GST) overhaul simplifies India\u2019s tax structure and lowers prices for many goods. However, for e-commerce sellers, the change arrives at the worst possible moment. Platforms and sellers must adjust billing systems, invoices, and inventory records just as the festive season begins. The festive period [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[25,772,669,708,249,746,215,631,33,625,668,60,36,235,3,43,44,47,302],"tags":[421,615,373,909,59,191,69,166,70,200,912,911,65,301,316,205,358,317,206,910],"class_list":["post-6760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-apparel","category-automotive","category-b2b","category-beauty-personal-care","category-e-commerce","category-fmcg","category-food-grocery","category-food-service-restaurants","category-footwear","category-health-wellness","category-home-products","category-india","category-lifestyle-fashion","category-luxury","category-press-quotes","category-retail","category-soft-goods","category-supply-chain","category-technology","tag-discounts","tag-festive","tag-government","tag-gst","tag-india","tag-indian-market","tag-indian-retail-sector","tag-modern-retail","tag-organised-retail","tag-pricing","tag-reform","tag-regulation","tag-retail","tag-retailing","tag-small-business","tag-small-retailer","tag-small-retailers","tag-small-scale-industry","tag-small-medium-enterprises","tag-taxation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GST Council Meets Today: What the Overhaul Could Mean for E-Commerce Sellers - Third Eyesight<\/title>\n<meta name=\"description\" content=\"The GST reforms land as festive season spending sets the direction for the retail year. 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