In a bid to become GST Suvidha Provider (GSP), e-commerce biggie Flipkart has increased its paid-up capital to Rs 2 crore from its existing Rs. 48.43 lakh to acquire a GSP license, reports The Hindu BusinessLine.
Note that last month, Flipkart along with other 38 companies was denied the GSP license as it was “ineligible as per financials”.
As per the current GSP eligibility criteria, GSPs need to have a minimum paid up capital of Rs 2 crore, and an average turnover of at least Rs 5 Crore during last three financial years (2014-15, 2015-16, 2016-17).
The HBL report also said that Flipkart plans to issue bonus shares by issuing 7 new shares for every 2 shares held, and in a board meeting held on 24th August 2017, the company has approved to issue bonus shares by way of a special resolution.
The second batch of approved GSPs include likes of HDFC Bank, Zoho Corporation, PwC and KPMG among the other 69 companies. A GSP acts as an interface which enables a tax payer to comply with the provisions of the GST law through its web platform- GSTN.
Why are e-commerce companies doing this
It looks like that the e commerce players are fiercely looking to ease GST regime for sellers as they seem to fear losing business or seller partners on the platform. Players such as Amazon, Flipkart and ShopClues partnered with taxation experts ahead of the GST roll-out on July 1 to make sellers GST-compliant.
In June, Amazon India and income tax e-filer ClearTax partnered to offer the GST software to sellers on the platform to help them become complaint of all the new tax return norms.
In February, Flipkart had said that it would be providing tools to its sellers to be GST compliant. It had also launched ‘GST Genie’ to educate sellers about GST via tuition videos, webinars, and expert advice on GST is given to its sellers.
Last month, Flipkart secured investments to the tune of $2.5 billion from SoftBank’s $100 billion Vision Fund. After this funding, Flipkart had in excess of $4 billion of cash on balance sheet.