This document provides information about payment settlement for sellers on Flipkart Marketplace. It discusses eligibility for payment settlement and describes the different settlement cycles for tier 1 and tier 2 sellers. The payment amount is calculated based on total order value minus applicable marketplace fees and taxes. Payments are made through separate prepaid and postpaid accounts. The timing of payments depends on when account balances become positive. The document also explains how settlements are handled for different order statuses like dispatched, cancelled, returned, or replaced orders. It concludes with descriptions of tax deducted at source (TDS) and the seller protection fund (SPF).

1. Payment Settlement

2. By completing this tutorial, you will be able to:
• Understand the eligibility for payment settlement
• Explain the settlement cycles
• Understand different components of your settlement amount
• Explain the payment settlement in different scenarios
• Describe Tax Deducted at Source (TDS)
Learning Objectives

3. You are eligible to receive payments if:
• You are a registered seller on Flipkart Marketplace with a verified bank account
• You have dispatched a Flipkart order
• You are at the end of your payment cycle
Eligibility for Payment Settlement

4. Flipkart transfers money to your bank account within
5 business days from the date of dispatch.
(Sundays and Bank Holidays are not considered as
business days.)
Flipkart releases payment every Monday,
Wednesday, and Friday.
(There could be a delay in money transfer based on
your bank’s NEFT settlement schedule.)
Example:
You dispatch the order on Tuesday, 02-Dec.
You should receive payment on or before Sunday, 07-
Dec. However, since Sunday is not a business day,
Flipkart will release your payment no later than
Monday, 08-Dec.
Flipkart transfers money to your bank account
within 10 business days from the date of dispatch.
(Sundays and Bank Holidays are not considered as
business days.)
Flipkart releases payment every Monday,
Wednesday, and Friday.
(There could be a delay in money transfer based
on your bank’s NEFT settlement schedule.)
Example:
You dispatch the order on Monday, 01-Dec.
You should receive payment on or before Friday,
12-Dec. Since Friday is a payment day, Flipkart will
release your payment on or before Friday, 12-Dec.
Settlement Cycles
Tier-1 Seller Tier-2 Seller

5. Settlement amount for an order is calculated on Total Order Item Value
Charges applicable to you on ‘Total Order Item Value’ are as follows:
1. Marketplace Fee:
a. Flipkart’s selling commission
b. Shipping / reverse shipping fee (depending on weight and zone)
c. Fixed closing fee. Know more about these fees from the Rate Card
2. Applicable service tax (please note that taxes are separate from the Marketplace Fee)
* Flipkart Discount Share is any promotional discount offer for which the cost is borne by Flipkart.
Eligibility for Payment Settlement
Total order Item value Price paid by buyer + Flipkart’s discount share (if any)*
=

6. Flipkart handles all your transactions in two separate accounts,
a) Prepaid
b) Postpaid
Prepaid
Prepaid account constitutes all settlements related to orders for which the payment mode is prepaid, i.e. through
credit card, debit card etc.
Postpaid
Settlements for orders in which the payment mode is cash on delivery are made from Postpaid account.
Additionally, any special settlements like those for Seller Protection Fund (SPF), Tax Deducted at Source
(TDS)reimbursement, Advertising services or Flipkart Advantage services are also made through postpaid
account.
Payment Accounts

7. The values in below table indicate the balance in your individual account. (Negative balance can be due to various
reasons like customer returns, or seller cancellation fee.)
For the above period, the net amount that Flipkart owes you is Rs.1,000 (4,000-3000). But, instead of paying you
Rs.1,000, Flipkart pays you Rs.4,000.
This is because Flipkart makes payments against individual accounts only, independent of each other. This means
that you receive payment only against your postpaid account and not prepaid account, as the balance for prepaid
account is negative. So, you actually receive a settlement amount which is different from what you had expected.
Payment Settlements – Understanding the Method
Date Postpaid
Account(Rs.)
Prepaid Account (Rs.)
06-Dec 5000 2000
06-Dec -1000 (returns) -5000 (returns)
Total 4000 -3000
Net Balance 1000
Settlement amount 4000

8. Now, let us understand further how and when payment will be made to an account in which the balance becomes
negative.
Payment Settlements – Understanding the Method
Date Order value Balance Payment
01-Dec 5000 5000 -
03-Dec -1000 (returns) 0 -
07-Dec -2000 (returns) -2000 Nil - negative
balance
10-Dec 1000 -1000 Nil - negative
balance
12-Dec 1000 0 Nil - zero
balance
15-Dec 2000 2000 2000
Total 2000 2000 2000
In this example, let us assume that the payment
due dates are Dec 7th, 10th, 12th, and 15th.
However, you will not receive any payment on
the first three dates because on the above
mentioned dates, your balance is either
negative or zero.
The balance finally becomes positive on Dec
15th and therefore, you will receive the due
amount (Rs.2000) on Dec 15th.
Remember that although the payment against a postpaid/prepaid account will be made only once the balance becomes positive,
TDS & SPF payments will keep happening irrespective of the balance in either of the accounts.

9. When an order is dispatched
The table below shows how a settlement is made for a dispatched product.
Steps:
Payment settlement - Dispatched Order
Order Item Order Item ID Order Date Order
Status
Order Item Value
(Rs.)
Settlement
Amount (Rs)
Settlement Date
OD41112200 ABC123 Nov 11, 2014 Dispatched 5000 3885 Nov 17, 2014
You dispatch the order (ABC123)
whose order item value is worth
Rs.5000
Flipkart charges a Marketplace Fee plus
Service Tax of Rs.1115 on the Order Item
Value
Flipkart transfers the net settlement
amount of Rs.3885 (Rs.5000 - Rs.1115) to
your bank account on due date

10. When you cancel an order (Seller Cancellation)
Steps:
When a buyer cancels an order (Buyer Cancellation)
Flipkart will not charge you any amount if a buyer cancels the order.
* Depends on seller cancelling the order before marking RTD or after marking RTD.
Payment Settlement – Cancellation
Order Item Order Item ID Order Date Order Status Order item
Value (Rs.)
Settlement Amount (Rs.) Due Date
OD41112200 DEF123 Nov 11, 2014 Cancelled 5000 Depends on which order
stage you cancel the order*
Nov 17, 2014
Buyer orders DEF123 You cancel the order
*Flipkart charges you a
Cancellation Fee (depending on
the cancellation slab in rate
card)
Price paid by buyer is refunded

11. The table below shows how a settlement is made if an order is marked Return To Origin* (RTO)
• +ve figures imply money going into seller account, -ve implies deduction from seller balance.
• A change of sign in consecutive steps indicates that the settlement for that particular amount/fee has been reversed.
• Service tax is calculated on the total Market Place fee (Here it is taken as 14% for representative purpose)
* RTO - when an order is returned to seller warehouse due to delivery failure or courier return
Note: All figures are indicative and have been used for the purpose of illustration
Payment Settlement – Return To Origin (RTO)
Dispatch RTO Net Result
Order Item value 5000 -5000 0
Commission (@8%) -400 400 0
Closing Fee -10 10 0
Shipping Fee -100 100 0
Reverse Shipping Fee 0
Total MP Fee -510 510 0
Service Tax -71.4 71.4 0
Settlement Amount 4418.6 -4418.6

12. The following example shows what happens when a customer returns a product due to sellers fault, e.g. faulty product,
misshipment, items missing.
Payment Settlement – Customer Return
Dispatch Return Net Result
Order Item value 5000 -5000 0
Commission (@8%) -400 -400
Closing Fee -10 -10
Shipping Fee -100 -400
Reverse Shipping Fee -120 -120
Total MP Fee -510 -120 -630
Service Tax -71.4 -16.8 -88.2
Settlement Amount 4418.6 -5136.8 -718.2

13. The following example shows what happens when a customer returns a product due to reasons where seller is not at fault.
e.g. Size issue, change of mind.
Payment Settlement – Customer Return
Dispatch Return Net Result
Order Item value 5000 -5000 0
Commission (@8%) -400 400 0
Closing Fee -10 10 0
Shipping Fee -100 100 0
Reverse Shipping Fee 0
Total MP Fee -510 -510 0
Service Tax -71.4 -71.4 0
Settlement Amount 4418.6 -4418.6 0

14. The following example shows what happens when a customer replaces a product due to sellers fault, e.g. faulty product,
misshipment etc.
Payment Settlement – Customer Replacement
Dispatch Return Dispatch Net Result
Order Item value 5000 -5000 5000 -5000
Commission (@8%) -400 400 -400 -400
Closing Fee -10 0 -10 -20
Shipping Fee -100 0 -100 -200
Reverse Shipping Fee -120 -120
Total MP Fee -510 280 -510 -740
Service Tax -71.4 39.2 -71.4 -103.6
Settlement Amount 4418.6 -4680.8 4418.6 4156.4

15. The following example shows what happens when a customer replaces a product due to reasons where seller is not at fault. e.g.
Size issue, color etc.
Payment Settlement – Customer Replacement
Dispatch Return Dispatch Net Result
Order Item value 5000 -5000 5000 5000
Commission (@8%) -400 400 -400 -400
Closing Fee -10 0 -10 -20
Shipping Fee -100 0 -100 -100
Reverse Shipping Fee 100 0
Total MP Fee -510 500 -510 -520
Service Tax -71.4 70 -71.4 -72.8
Settlement Amount 4418.6 -4430 4418.6 4407.2

16. • TDS is one of the modes of collection of taxes, by which a certain percentage of amounts are deducted by an
entity at the time of making/crediting certain specific nature of payment to the other entity.
• The deducted amount is remitted to the Government account.
• The concept of TDS facilitates sharing of responsibility of tax collection between the deductor (entity which is
making payment) and the tax administration.
Tax Deducted at Source

17. In case of Flipkart Marketplace transactions,
The seller does not deduct any TDS from Flipkart Marketplace while giving commission.
• However, the seller should deposit the requisite TDS into the Government Treasury.
• The income received by Flipkart Marketplace is characterized as commission income which means that the
sum payable by the seller will be subjected to taxes under section 194H of the IT Act at the rate of 10%.
• Tax rate on shipping charges is 2%. You can get the TDS amount reimbursed by Flipkart upon production of
receipts.
Tax Deducted at Source

18. The Seller Protection Program (SPP) uses the Seller Protection Fund (SPF) to safeguard you from incurring losses
under circumstances where you are not at fault.
You can approach Flipkart Marketplace within 60 days of any of the following occurrences:
• Product lost/damaged during forward and reverse shipping
• Missing/defective returns due to buyer fraud
• Chargeback due to buyer fraud
• Dispute resolution in buyer’s favour even when you are not at fault
Seller Protection Fund (SPF)

19. 1. Click 'Contact Seller Support' on top right of your seller portal. This will take you to the ‘Seller Support Ticket
Dashboard’ page.
2. Click on 'Create Ticket' on the right side of the page.
3. On the ‘Create Support Ticket’ page, select Issue Type as 'SPF Claims' from the drop down menu.
4. Enter other details and click on ‘Submit’.
How to Claim SPF

20. The commission invoice clearly lists down all the
fees that Flipkart charges you.
You can download invoices from Payments >
Invoices on your seller portal.
A sample commission invoice is shown on the right
Commission Invoice

21. Whenever Flipkart Marketplace provides a discount on
your products, it will raise a debit or credit note
(depending on whether you use Flipkart’s invoicing
solution) to reimburse you for this discount.
Know more about this at
https://seller.flipkart.com/LearningCenter/article-
slideshare/growing-your-business/promotions/learn-
about-promotional-transactions
A sample debit note is shown on the right.

22. In this tutorial, you learned about:
Summary

23. Thank You