Home >Companies >News >Flipkart, Swiggy face tax surveys

The Income Tax department has conducted surveys at the Bengaluru offices of e-commerce and foodtech firm Flipkart and Swiggy, in relation to a matter of evasion of input tax credit by their third-party vendors, according to three individuals aware about the matter.

The surveys which began on Wednesday at the premises of these companies is a part of the nationwide drive which the tax department has undertaken against firms and vendors evading GST.

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“For both companies, due to a third-party vendor default, these surveys are being conducted at the offices of these startups. The IT department is asking for financial statements and trying to understand the payments made to these vendors," said one person aware about the surveys.

For Flipkart, the survey is currently underway in offices of its group logistics and freight company InstaKart Services Pvt. Ltd., where two vendors which provide man power services to the organisation seem to have evaded the input tax credit.

“The officials from the income tax department have contacted us. We are providing them all the required information and are extending our full cooperation. We believe we are in full compliance with all applicable tax and legal requirements," said a Flipkart spokesperson.

Currently, even Swiggy employees are being questioned for one of its vendors, which seems to have also evaded the input tax credit.

"As a law-abiding company, we are in full compliance with the tax and legal mandates. The survey by the IT officials is currently underway and our team is extending full cooperation to the concerned authorities," said a Swiggy spokesperson confirming the development to Mint.

The Income Tax Department is conducting surveys in the premises of Swiggy and Flipkart in connection with alleged tax evasion involving bogus input tax credits, a government official said.

"It is a limited exercise of information gathering, not a search," explained the official. Surveys are less extensive than searches and are done only during business hours.

The move is part of the government's drive since mid-November against use of fake invoices by businesses for wrongfully availing excessive input tax credits. IT department's searches are based on information received from GST authorities. The compliance drive along with tightening of GST procedures has already helped to Goods and Services Tax (GST) revenue collection to scale the highest level so far in December.

Income Tax officials had conducted surveys at the premises of Larsen and Toubro Ltd and Zee Entertainment Enterprises Ltd on Monday in a similar case of alleged tax evasion, Mint reported on Monday. In those two cases, officials visited company premises across multiple locations.

This showcases how Income Tax authorities and GST authorities at central and state levels are taking concerted steps to check suspected revenue leakage. The effort relies extensively on data analytics and intelligence gathered from multiple sources.

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