Blow on supplies hit auto component marketplace
Gurugram, November 19, 2017: boodmo, country’s largest online marketplace for auto component buyers, raised its concern over GST impacting the auto component marketplace, adversely.
Oleksandr Danylenko, co-founder, boodmo, said, “Our new venture, which was emerging as a ‘sunrise’ business, is badly impacted due to GST’s complex and cumbersome model, especially for e-commerce businesses. The 16-point invoice is not as per the marketplace requirement and, this way, businesses like boodmo, which is heavily dependent on suppliers, can neither buy nor sell its products.”
“The major problem is that our suppliers are not ready to send products directly to customers; they want to sell through us to cut through the complexity of the GST,” Danylenko added. In the online automotive retailing, e-commerce platforms like boodmo have to cater to both B2B and B2C customers.”
He further highlighted, “Spare parts are levied with 28% GST, the highest slab in the structure, which has practically left us with no profit margin. Notably, while other consumer services are taxed at 18% under GST, even the logistics service for auto spare parts is taxed at 28%, that is 10% higher than other consumer services.”
GST law has also explicitly excluded e-commerce businesses from its composite scheme. Government introduced the composition scheme under GST law which allows a nominal tax of 2% to be paid by SMEs. “Most sellers registered with our auto component marketplace operators are small and medium enterprises, as a result of which, we are suffering,” he opined.
“However, Government is conscious of the concerns of the online seller and has addressed some of them, already. We hope that it will continue to look at smoothening the remaining issues,” Oleksandr added.
Corporate Comm India(CCI Newswire)