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

The Economic Times - - Disruption: Startups & Tech - Mugdha.Vari­yar @times­group.com

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.

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