Indian e-commerce has seen few ups more downs this year – fuzzy FDI laws, blurry VAT and Sales Tax issues, seizures of Amazon warehouses in Karnataka – but Flipkart specifically has been in the news for all the grey reasons this year.
Commercial Taxes Department of Uttar Pradesh came down on Flipkart pretty heavily last week. A raid on Flipkart’s warehouse resulted in the seizure of goods worth 47 lakh rupees which was followed by a penalty of Rs. 13.8 lakhs. “Two trucks were bringing shoes from outside Uttar Pradesh for the Dasna-based warehouse of Flipkart. However, they were carrying more goods than they had declared. Also, we found a blank Form 38 with them, which is an issue of non-compliance,” said an official of the department who was part of the raid.
About 171 pairs of shoes were brought in undeclared in the trucks stopped by the tax department. When merchandise is brought into a state, the Form 38 should be duly filled out. If the shipment is being made to an individual, Form 39 should be filled out. These forms cost money, and cost cutting could be a possible reason why sometimes certain shipments are without these forms. Another probable reason for this overlook could be that these laws are different from state to state.
Meanwhile, Flipkart denied this event entirely, and added that more e-commerce companies are in the government’s radar for similar violations. “This information is absolutely incorrect. We are in compliance with the laws of the land and there was no raid or seizure of goods in our Ghaziabad warehouse,” said a Flipkart spokesperson in an email.
Everybody remembers Flipkart’s Big Billion Day. It was one of the most promising days in Indian e-commerce – with hype around it building for days. But it left too many customers as well as sellers disgruntled when it finally happened. Not only Flipkart lost face on social and print media for the blunders that happened that day, but it even sent a sorry email, which again a lot of customers cast doubts and nit-picked upon.
Soon after, offline traders registered their discontentment with Flipkart by filing a complaint with the Competition Commission of India and launching an online crusade called WeWillAct.
This June, Flipkart decided to stop delivering for orders worth more than Rs.10000 to UP, which is incidentally the state where the recent raid occurred. This decision was said to be motivated by the high number of instances of people in UP ordering expensive items using cash-on-delivery and refusing to accept them when they were delivered. A few months before that, Flipkart received flak for having sacked a lot of employees.
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