Flipkart sellers raise concerns over GST OTP mandate.

Many Flipkart sellers are confused and frustrated over a new requirement to verify their Goods and Services Tax Identification Number (GSTIN) using a one-time password (OTP) verification process.

Sellers claim that Walmart-owned Flipkart has not provided a clear reason for implementing this process and suspect that it may be a tactic to access their confidential GST data under the guise of verifying GST credentials.

By sharing the OTP, Flipkart could gain API (application programming interface) access to our data, allowing them to view all historical data since GSTIN registration," said a seller who has been on the marketplace for nine years.

Concerns raised by Sellers-

Sellers expressed concerns that this data could reveal their annual turnover and sales figures on competing platforms like Amazon and Meesho. "To prevent potential location blocking, please verify your GSTINs through the OTP verification process," read a message on the Flipkart portal, according to screenshots shared by the sellers.

Reply from Flipkart End-

In response, Flipkart stated that the OTP entered by sellers is a one-time measure to ensure that the GST registration number matches the seller conducting business on their platform, preventing unauthorized use of a seller's GST number. "This does not give us access to any data submitted in their GST returns," a company spokesperson clarified.

Sellers argue that Flipkart already checks their GST documents, PAN, and Aadhaar details during onboarding. They find it more reasonable to request OTP verification from new sellers, but see no justification for requiring it from long-standing sellers. "Some sellers have provided OTP access to avoid disrupting their festive season sales. This feels like an attempt at data theft," said another seller, noting that other platforms, including Flipkart's Myntra, do not have similar processes.

"If Flipkart claims the OTP verification is a one-time process, it might be just to confirm the registration, but providing the OTP could still give the company access to the data sellers have filed on the GST portal. The sellers' concerns are not entirely unfounded," noted a tax expert.

Conclusion-

In a nutshell, this is to state that seller and Flipkart raised an argument regarding the same and they still need to seek a common approach to resolve the same. Sellers are expecting a clear reason to implement the process by Flipkart as they have their own reason to suspect.