Flipkart accused of flouting amended GST rules on Goods Transport Services
Madras High Court lawyer alleged continued tax evasion despite new law barring e-commerce platforms from claiming transport exemptions; seeks urgent intervention from Commerce Minister Piyush Goyal.
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A Chennai-based lawyer has written to Union Commerce and Industry Minister Piyush Goyal, alleging that Flipkart India Pvt. Ltd. continues to violate the recently amended Goods and Services Tax (GST) provisions related to Goods Transport Agency (GTA) services provided through e-commerce platforms. The complaint accuses the Walmart-owned company of persisting with “deliberate non-compliance” despite a clear legal amendment that explicitly bars such practices.
In his letter dated October 16, 2025, K. Narasimhan, Advocate at the Madras High Court, claimed that Flipkart’s billing structure still enables it to claim undue GST exemptions on transportation charges- an approach that, according to him, results in “substantial revenue loss” to the government exchequer and undermines the spirit of the amended tax law.
“Despite the legislative amendment and the unambiguous message it sends, Flipkart continues to operate as if no such amendment exists,” Narasimhan wrote. “The company persists in maintaining its previous billing model and continues to claim GST exemptions for transport charges under provisions that are no longer applicable.”
Background of the complaint
This isn’t the first time Flipkart’s tax practices have come under scrutiny. Narasimhan noted that in August 2025, he had previously raised concerns about the platform’s “systematic” method of restructuring customer bills to exploit GST exemptions meant for small transport operators.
According to his earlier complaint, Flipkart allegedly split customer invoices into separate components- product cost and transport charges- allowing it to reclassify marketplace fees as transport services and claim GST exemptions under GTA provisions.
While the company had opted for GST payment under the forward charge mechanism, it was simultaneously claiming exemptions applicable only to small-scale goods transport operators, effectively enjoying both benefits. “It was a case of having their cake and eating it too,” Narasimhan stated, arguing that this approach allowed the platform to evade legitimate tax liabilities.
To address such practices, the government recently amended the GST law, clarifying that GTA services provided by or through e-commerce operators would no longer qualify for exemptions. The amendment aimed to prevent large, resource-rich digital marketplaces from misusing exemptions intended for small transporters.
Narasimhan alleges that Flipkart has continued its old billing practices even after the amendment came into effect- essentially ignoring the new compliance mandate.
The letter adds that this kind of defiance sets a dangerous precedent in India’s e-commerce sector. It could embolden other digital platforms to similarly delay compliance, weakening the enforcement power of legislative amendments.
“When a major corporate player openly defies amended tax legislation, it signals to others that non-compliance may be tolerated,” the advocate warned. “This creates a two-tier system- where small taxpayers face immediate penalties, while large corporations act as if compliance is optional.”
Highlighting the potentially significant loss to the exchequer, Narasimhan has urged the government to initiate an immediate and comprehensive investigation into Flipkart’s post-amendment tax practices.
Beyond the Flipkart case, the letter recommends systemic reforms, such as stricter compliance timelines, regular audits of e-commerce operators, and clear enforcement protocols after tax law amendments to prevent future misuse.
According to Narasimhan, robust monitoring is essential because large e-commerce players handle millions of transactions daily, giving them both the technical sophistication and financial incentive to exploit complex tax provisions.
