There have been rumours playing around in India like wildfire that major e-commerce portals in India like Amazon and Flipkart are not delivering products in cities of UP (Uttar Pradesh), a northern state of India. At first, a discussion on popular question-answer website Quora – “Why are Amazon and Flipkart not delivering products in Noida?” become viral. Later, popular site ScoopWhoop posted an article that act as a catalyst to the rumour, spreading it further to the masses.
An anonymous user claimed to be ex-employee at Flipkart stated on Quora, – “One time the delivery boy who was carrying three Macbooks was looted at gunpoint in an open field which was given as the address. We could not track down these buyers because the only piece of identity we had were mobile numbers and an address both of which are easy to fake in India.”
As more people came to join discussion the more flavours were added to the rumor mills and they unwittingly helped to keep it going on. In another question – Why is Flipkart not delivering mobiles to Noida?, one of the user stated – “Because almost 50% population of UP is corrupt or idiot.” (sic)
In one of many questions posted on Quora over same context, the person who claimed to be working with the risk investigation team at Amazon said, “For some reasons, the order abuse cases in these regions is higher (than) that (of) the rest of India. People used to order iPhone and mention they got a Nokia model phone. They mentioned the iPhone was not working and so customer service used to initiate return and what did Amazon got in the return package, bricks, biscuit packets, cardboard pieces. It’s very easy to play fraud with Amazon and Flipkart (sic).”
The social media was abuzz till end of last week about how e-commerce firms such as Flipkart, Amazon and Snapdeal are finding it difficult to service certain areas in Noida and Ghaziabad due to increased instances of fake orders or manhandling of their delivery staff. However, these restriction reports were all on social sites and were never came from the e-commerce firms directly/officially. It’s just that few random people from nowhere post answers anonymously claiming that they are ex-employee at Flipkart or Amazon and few good people out of habit spread the words further to end up what started as casual novice question, ended up breaking news which is otherwise utter lies.
Breaking the silence over this regionalism issue, spokespersons of both Flipkart and Amazon have told a news portal that they do deliver in Noida. There are however some limits on Cash-On-Delivery due to the state laws.
A spokesperson from Amazon also conveyed that they deliver products in Noida.
Another Flipkart spokesperson said the company supplies to many cities in Uttar Pradesh and has two warehouses in the state – one at Dasna and another newly opened one at Dadri. “However, for any shipment sourced from outside the state, the government has set a limit of Rs 5,000, as per the commercial tax department. Our focus has always been to provide a seamless and unmatched shopping experience to the customers, while ensuring all compliance with the law of the land,” the spokesperson added.
The fact that Flipkart has recently opened its two new warehouses in Up – one at Dasna and another newly opened one at Dadri which is near to both Noida and Ghaziabad clearly depicts company’s willingness to deliver in UP especially Noida which is being portrayed as blacklisted city by e-commerce firms, thanks to rumor mills.
The Real Reasons
It is true that there is some restrictions to Cash-on-Delivery purchases where Amazon do not deliver items worth Rs.5000 on COD while Flipkart’s Max. limit is Rs.10,000. But, this is not because of customers who place the orders from UP cities but because of UP state tax policy where any shipment sourced from outside the state, the government has set a limit of Rs. 5000/-, as per the commercial tax department.
Notably, in UP for every B2B purchase from another state, the buyer has to issue a e-Sancharan(Form 38) or a Road Permit to the seller and then only the shipment is allowed into the state. Now, what happened is a lot of traders in UP started placing bulk orders of items online and started reselling it through their brick and mortar shops. With this, they didn’t have to issue a Form 38, which meant that the UP Sales tax Dept. will have no idea of the trader’s purchase, so no idea about his sales, which led to a lot of sales tax abuse.
Now, state govt. of UP consider every shipment with invoice value greater that Rs.5000 entering UP to be a commercial shipment. This means that now even if you want to buy a mobile worth more than 5K from Flipkart (a retail purchase), you have to issue a Form-38 to the seller on flipkart which is a cumbersome process for anyone who wants to buy things online.
Now the process of issuing the form is rather simple – Go to your nearest sales tax office, get in long queue, get a form 38 issued, provide a unique token number that you will get with the form to the seller, who can get the form issued from his nearest sales tax office using that unique token number. Now the Shipment can move into UP without any hassel.Although, e-Sancharan Form 38 Request can be done online, but the cumbersome process remains the same.
So the real reason as why e-commerce companies have put a maximum limit on COD delivery is not the people of UP but the state laws and red-tapism.