Income Tax Dept Cracks Whip Against Flipkart, Swiggy Over GST Dues; Starts Surveys, Investigation

In the wake of a nationwide drive against firms eluding GST Income Tax, the Income Tax department is conducting surveys to inspect tax evasion. Based on the inputs received through GST authorities, the IT department is inspecting Indian e-commerce giant Flipkart and food ordering firm Flipkart and Swiggy, regarding tax frauds practised by their third-party vendors.

Where Are The Surveys Being Conducted?

The surveys are undertaken in the working premises of Swiggy and Instahart (logistic partner of Flipkart) in Bangalore.

“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,” sources said.

Instakart has several vendors under it that provide mower for carrying out logistics for the firm. Two among these were found invading the tax credits who are currently under inspection. In the case of Swiggy, the tax department is questioning the employees regarding fake tax credits processed by one of the vendors.

It should be noted that the inspection is not a rigorous search but just a survey conducted during business hours. “It is a limited exercise of information gathering, not a search,” explained the official.

What Do Flipkart And Swiggy Have To Say?

Swiggy and Flipkart both have accepted that they are under the inspection of the tax department. Reportedly, they have also assured that they were fully concurrent with the legal tax ordinance.

Speaking about the surveys Flipkart highlighted, “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.

On the other hand, a Swiggy spokesperson stated, “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,”

Flipkart and Swiggy are not the only ones who were noticed by the tax department. Earlier on Monday, construction company L&T and Zee Entertainment Enterprises were also surveyed for similar evasions. The prompt reaction by the GST and IT departments indicates the government’s concerns towards illicit tax practices.