E-commerce major fears impact on working capital, job losses

Mumbai, March 17:
Even as Amazon India prepares for the much-awaited Goods and Services Tax (GST) roll-out on July 1, it is still worried about the proposed 1 per cent Tax Collection at Source (TCS) on e-commerce players.

Industry players feel the TCS would impact the working capital of small sellers and lead to massive job loss.

Amazon, along with all other e-commerce players, has been constantly engaging with the government in this regard.

Gopal Pillai, Director and General Manager - Seller Services, Amazon India, told BusinessLine: “In the whole, we welcome the GST, and it will be great for the ecosystem and the economy. The GST will remove a lot of barriers sellers have to face when transacting between States.

“But at the same time, the TCS is not the right thing for the sellers. First, it makes the marketplaces to do the tax collection job by collecting some money from the sellers and giving it to the government. But this will impact about 1.8 lakh jobs and constrain the Rs. 200-crore working capital going into the system every month; as a result, it will have an impact on the consumer experience.”

However, the company is also carrying out several initiatives to spread awareness among the sellers on the GST and its benefits. The company has also created a portal with content and videos guiding the sellers on the GST.

“This portal is getting a lot of traction, which also says that sellers lack knowledge on the GST. We are also conducting training programmes for the sellers. We have a lot of initiatives going on at present that help sellers efficiently do business on our platform,” Pillai said. These initiatives have resulted in 167 per cent growth in the number of “Crorepati” sellers (with an annual turnover of Rs. 1 crore) on Amazon’s platform, he claimed.

Amazon.in had launched a flagship programme for, AmazonConnect, for sellers to further grow profitably on the marketplace. Using an integrated platform, it allows sellers to interact closely with company’s senior leadership, better understand the company’s seller-centric products and services, get accustomed to the GST and be aware of upcoming innovations and understand emerging trends in e-commerce.

Starting with Mumbai this year, AmazonConnect will be expanded to several Tier I and II cities across India, Pillai said.

He added that the firm will launch Connect Lite for sellers residing in Tier II cities and below, to help them understand inventory management, seller performance management and discoverability of products, to name a few.

At present, over 50 per cent of Amazon’s sellers come from smaller towns and cities.