Swiggy And Flipkart Accused Of Tax Evasion Of More Than Rs 950 Crore In India

The Income Tax (I-T) Department has found total tax evasion of over Rs 950 crore by Swiggy and Flipkart’s unit Instakart.

Third-party vendors were also connected with concealment of taxable income; Business Standard reported citing the I-T Department’s initial findings.

“The survey operations on the companies resulted in impounding of incriminating documents evidencing tax evasion issues including non-deduction from tax deducted at source (TDS) on commission income and cancellation charges by Swiggy and their restaurants along with shifting of loss from Flipkart to Instakart,” an official told the paper.

Tax concealment by Instakart is Rs 650 crore, while the remaining Rs 300 crore is by Swiggy, the report said.

On January 7, the department began conducting surveys at the Bengaluru offices of Swiggy and Instakart – the logistics arm of Flipkart. The survey was in connection with an allegedly wrongful input tax credit (ITC) under the Goods and Services Tax (GST) system.

When contacted by Business Standard, spokespersons for Flipkart and Swiggy denied receiving any such formal communication from tax authorities.

“Swiggy is a law-abiding company that has always operated in full compliance with the regulatory framework and paid all applicable taxes promptly. We have extended our full cooperation to the IT dept in its recent survey and will continue to assist them with their queries if any,” the spokesperson told the publication.

“During the survey, we fully cooperated and provided all documents to the complete satisfaction of the tax officials in support of our compliance and record management. Our senior officials had appeared before tax authorities from time to time and provided all information and clarifications as sought. We will continue to work with the tax authority as and when we hear from them,” the spokesperson for Flipkart said.

The department will send a final report on the direct tax board’s findings at the end of January, the report added.

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