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Deluged with consignments courier firms refuse new e-commerce orders

Orders have piled up at various delivery points leading to delivery companies declining new orders since the last four to five days

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Diwali may be long over, but e-retailers and courier firms companies continue to struggle to reach consignments ordered for the festival by hapless consumers. And given the pile-up of consignments across delivery points, their wait is only set to get longer.

The situation is so grim that some courier companies including Blue Dart have even stopped accepting new orders e-marketplace operators since the last four to five days.

“Earlier we were making 100 to 200 deliveries a day, but with over 3,000 deliveries to be made daily, our resources are fully occupied and hence new requests are not being accepted,” said an executive at a Blue Dart centre in Mumbai.

Queries seeking official comments from Blue Dart Express remained unanswered.

Though courier firms and e-tailers did not quantify the delayed shipments, vendors estimate it to be around 25-30%.

While refraining to comment on non-acceptance of new delivery requests, FedEx officials acknowledged surge in e-commerce shipments.

David Canavan, vice-president operations India, FedEx Express Europe, Middle East, Indian Subcontinent and Africa (EMEA), said, “E-commerce continues to grow at a fast pace in India. Over the past few weeks, the market has seen a surge in the volume of e-commerce shipments during the festive season. We continue to work with our e-commerce customers to ensure that we deliver the best possible service in a seamless manner to support this growth.”

E-marketplace operators Flipkart, Amazon, Jabong, Myntra and Shopclues did not respond to queries.

A Snapdeal spokesperson denied delays in shipments from their operations saying, “Our deliveries are on track.”

eBay India said e-commerce industry has received unprecedented and overwhelming response this festive season and that there were some delays during the peak Diwali week. However, Vidmay Naini, director and business head of eBay India, denied any instance of courier companies not accepting new shipment requests. 

“We work with eight different courier companies and this approach helps mitigate any such challenges that may occur,” said Naini, adding that eBay hasn't faced any incidents of fraudulent delivery or misplaced/lost merchandise.

Also, vendors are also raising concerns on rising instances of fraudulent deliveries. Recently, a Snapdeal customer received a Vim soap bar and a half piece of brick instead of a Samsung smartphone.

The Snapdeal spokesperson said, “It was an unfortunate incident. The customer was given an option to take refund or seek replacement – he chose refund. The fraudulent delivery is being investigated currently.”

Vijay Kumar, chief operating officer, Express Industry Council of India (EICI), said the express courier industry typically experiences misplacement or loss of under 0.5%.

Clarifying the courier industry's stance on the VAT issue, Vijay Kumar said that express companies are only carriers of e-commerce shipments and perform the role of pick-up of shipments from consignor and delivery of shipment to the consignee.

“Express companies are involved in the service of courier/express and accordingly they deliver the goods, documents, articles from one location to another, as per the instruction received from the consigner and for that they get service charge / freight from the consigner and deliver goods on the written address for those consignments. As far as sale is concerned they never get any information / knowledge about the terms and conditions of sale between the consignor and consignee. They are in no way dealers or agents of neither the consignors nor the consignees,” said Kumar.

The Central Sales tax Act, 1956, clearly states that e-commerce transactions between non-resident suppliers can never be made liable to VAT in any state and that Central Sales Tax (CST) is liable to be paid by the suppliers in the origin state.

“Some states like West Bengal, Sikkim, Orissa have formulated policies for dealing with e-commerce consignments which seeks to find a balance between their revenue concerns and consumer interest. E-commerce (business to consumer) shipments attract an entry tax around 1-3%.

“Courier companies who carry these shipments on behalf of e-commerce companies pay entry tax to commercial tax authorities online before delivery of such shipments,” said Kumar hoping that goods and services tax regime gets introduced at the earliest thus mitigating all the tax related issues pertaining to e-shipments.

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