India's top e-commerce platforms, Amazon and Flipkart, have collectively passed on more than Rs 300 crore in GST savings to customers during the initial days of their festive sales, industry sources said.
Following the new GST rate regime effective September 22, both companies implemented measures to ensure that tax reductions reach end consumers. Flipkart stated that over Rs 200 crore in GST benefits were passed to customers through its marketplace during the early "festive sale" days, while Amazon reported more than Rs 100 crore in savings across appliances, fashion, essentials, and other categories during its 'Great Indian Festival'.
The revised GST structure replaced the previous multi-tier rates with two main slabs of 5% and 18%, aiming to reduce the tax burden on over 300 daily-use items and make products more affordable for consumers.
To facilitate the changes, Flipkart introduced a dedicated storefront initiative, 'GST Bachat Utsav,' and enhanced its seller dashboard with automatic backend updates of the new GST slabs. These measures help sellers adopt the revised rates and ensure price reductions are effectively passed to buyers.
Amazon, meanwhile, provided sellers with tools and guidance to review Product Tax Codes (PTCs) and apply correct GST rates. The platform automatically updated GST rates for select product categories and conducted masterclasses to educate sellers on compliance, allowing customers to benefit from reduced taxes.
The government has recently sought clarifications from some e-commerce players after reports of price hikes on certain items post-GST reduction. Both Amazon and Flipkart emphasized that sellers remain responsible for pricing, but the platforms are actively supporting compliance and facilitating the smooth transition to lower tax rates.
The GST benefits coincided with record traffic during flagship festive sales - Flipkart's Big Billion Days (TBBD) and Amazon's Great Indian Festival (GIF). According to Datum Intelligence, online festival sales reached Rs 60,700 crore in the first week, marking a 29% year-on-year growth and the strongest opening ever for India's digital retail sector. The report projects total festival sales this year to exceed Rs 1.2 lakh crore, up from nearly Rs 1 lakh crore last year.
The combined impact of GST cuts, high-value purchases, and participation from Gen Z shoppers is expected to make this year's festive season the biggest yet for India's e-commerce sector.
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