Not Enough in this Kart to Get GSP Tag
Ecommerce co Flipkart missed out on becoming a GST Suvidha Provider because of low paid-up capital of .₹ 48 lakh
Bengaluru: Flipkart missed out on becoming a GST Suvidha Provider (GSP) as it fell short of the minimum paid-up capital requirement of .₹ 2 crore. Flipkart was among several internet firms to have applied for a GSP licence to be able to transfer invoices under the Goods and Services Tax directly to the central database.
Flipkart Internet, however, fell short of the .₹ 2-crore mark with .₹ 48 lakh in paid up capital, according to a source aware of the matter. The company had applied for a GSP license to keep more control over GST filings.
According to MCA filings, Flipkart’s paid up capital is .₹ 48.43 lakh. Apart from Flipkart, 38 other applicants, including ClearTax, Moglix and Intuit India did not make the cut as they were found to be “ineligible as per financials”, according to the GST Network portal.
“There are some procedural matter to be clarified, we shall be reapplying for GSP shortly,” a Flipkart spokesperson said. The GST Network, the nodal agency in charge of the technological infrastructure for GST, had earlier this month put up a shortlist of 69 companies selected for the final round to become GSPs from over 160 applicants. These include HDFC Bank, Zoho Corporation, PwC and KPMG.
The GSTN had lowered the eligibility criteria for applicants in the second batch to .₹ 2 crore paid up capital from .₹ 5 crore and an average turnover of .₹ 5 crore in the last 3 financial years from .₹ 10 crore.
One of the applicants, deemed ineligible, said it was not selected despite meeting the requirements, since it had only two years of turnover, but fulfilled the criteria of an average turnover of .₹ 5 crore. “We have written to the GSTN to seek clarity,” the company said without willing to be identified. The GSTN did not respond to specific queries.
ClearTax, which is developing its own software solution for businesses to comply with GST, said it was looking for a GSP license mainly for cost optimisation. The company likely did not make it since the company's registration in India is only over a year old. “A GSP is only a pass-through for us, with zero impact on our offerings. From Day 1, we have opted for a multi-GSP approach to ensure our clients have the best experience. Our own GSP license would only offer cost optimisation as we pay GSP fees to connect to GSTN,” ClearTax CEO Archit Gupta said, adding that the company will continue to be a multi-GSP, even if it gets a GSP licence.
On the other hand, Infosys, which had also applied to be a GSP, withdrew its application. While the IT company said it wanted to focus on the GST portal, for which it secured a .₹ 1,380-crore contract, industry members said the company withdrew following complaints of conflict of interest.