A brief yet major supply disruption was caused to Cloudtail India, one of the largest retailers on Amazon India platform, following the suspension of its goods and service tax registration for Haryana, a warehousing hub for Cloudtail, on Monday, two people in the know said.
The tax authorities finally revoked the suspension on Tuesday afternoon, after more than 20 hours of confusion among scores of Cloudtail vendors who were not able to generate e-way bills to send their supplies to Cloudtail warehouses in Haryana, the sources said.
“We would like to reiterate that Cloudtail’s Haryana GST registration is current and valid. We continue to operate in adherence to all applicable GST requirements,” a Cloudtail spokesperson said without specifying why the GST disruption happened in the first place.
According to a tax official, the company’s monthly GST returns were in order, therefore the suspension could have been due to either an outstanding demand that was not complied with by the company, or an additional input tax credit availed which was not meant to be taken.
The disruption is seen as a setback to the online retailer, especially at a time when e-commerce companies are working overtime to fulfil surging demands as millions of Indians feel safer to stay at home and order everything from food to clothes online rather than venturing out to malls and high streets amid the pandemic.
As per provisions in law, GST registration can be cancelled if a company has not filed returns for six months, for taking extra input tax credit on the back of fake invoices or bills and therefore taking wrongful tax exemption, or for not having started business operations after six months of taking GST registration.