Government Tightens Scrutiny on E-Commerce Platforms After GST 2.0 Cuts

In the wake of the rollout of GST 2.0 on September 22, the central government has placed e-commerce platforms under stringent surveillance to ensure that the benefits of tax cuts actually reach consumers. According to sources, authorities are actively monitoring whether online retailers have reduced prices commensurately, rather than exploiting the window to raise margins.

Officials say that complaints poured in soon after the GST overhaul, prompting the government to “pull up” certain e-commerce operators over anomalous price behaviours. Some platforms are said to have cited “technical glitches” when questioned about discrepancies between pre-cut and post-cut pricing.

A key focus of the monitoring is the period leading up to and following September 22. The government is comparing the Maximum Retail Price (MRP) of a basket of 54 essential and fast-moving goods. Reports from field formations on these price movements must be submitted to the Central Board of Indirect Taxes and Customs (CBIC).

Sources say some e-commerce players have already received informal warnings over discrepancies in pricing. As one source put it, “We are monitoring e-commerce operators for a smooth and genuine passage of GST cuts.”

However, the government has also signalled caution. Officials are reluctant to overreact to early complaints and are allowing time for market correction. Because the government is also of the view that it is in the interest of the companies to pass on the benefits. “Once such things find traction, they cannot go unnoticed, because society today is so interconnected. If businesses don’t pass on the benefits to consumers, there will be a backlash against their businesses,” Sanjay Kumar Agarwal, CBIC Chairman had told Outlook Business in an earlier interview.

E-commerce majors appear to be taking note. Flipkart, for instance, said it had already rolled out measures to ensure the tax reductions filter down to shoppers. The company has “sensitized seller partners” through training sessions and webinars and tweaked its backend systems to automatically reflect the revised GST slabs on the seller dashboard. It is also showcasing the changes under a special storefront titled GST Bachat Utsav, highlighting tax-linked savings more prominently for customers.

“These steps are designed to ensure that sellers can seamlessly pass on the benefits and that consumers see lower prices without delay,” a company spokesperson said in response to a media query, adding that Flipkart was working closely with its sellers to reinforce transparency as the new tax regime settles in.

Meanwhile, consumer redressal channels are also seeing increased activity. The National Consumer Helpline has reportedly received nearly 3,000 complaints concerning the non-passage of tax cuts or “dark patterns” in discounting and price presentation. The Ministry of Consumer Affairs is forwarding complaints to CBIC for further action. However, it is unclear how CBIC can take up this issue in absence of a legal mechanism.

The revised regime collapsed multiple previous slabs into just two—5 % and 18%—with the intent of simplifying taxation and lowering prices for nearly 99% of daily-use goods. But the impact hinges on whether market players pass on savings or absorb them as extra margin.