Flipkart, one of the leading homegrown e-commerce marketplaces, has applied for a license to become GST Suvidha Provider (GSP). This move is said to be a strategic one to expand its seller base.
With such license in hand, the Bangalore-based e-commerce platform will have direct access to the GST Network. The move will also help the e-tailer process invoices in-house, rather than outsource and control costs associated with tax collection at source.
The major reason behind several companies applying for the license of GSP is that it entitles uploading of over 2 billion invoices every month.
The role of a GSP is to provide technology solutions for taxpayers and other stakeholders to connect to GST systems for compliance. This may range from registration of the entity to uploading of invoice details and filing returns.
As per the sources, which revealed information to Economic Times, Flipkart is one of nearly 200 applications received in the second phase by GSTN — the nodal agency handling technological infrastructure for the goods and services tax.
The agency has already shortlisted 34 GSPs, including Tally, EY and Reliance Corporate IT Park, a Reliance Industries subsidiary — in the first phase of the applications.
In the second phase, several startups such as ClearTax, Juspay, and LegalRaasta have decided to apply for GSP licences after GSTN lowered eligibility criteria in terms of paid-up capital and turnover.
The final list of GSPs — the entities which will have approved license, will be out after a demonstration of GST solutions by the shortlisted companies. Some of the other shortlisted GSPs include Delloite and Tata Consultancy Services.
Experts believes that many GSPs are looking to become providers of application program interface (APIs) for other application service providers (ASPs), while some are looking to be captive GSPs, developing solutions for their own processes and partners. Looking at the business model, it seems that Flipkart is looking to be captive GSP to help its seller partners.
