The Income Tax Department is conducting a survey at Instakart, a group company of e-commerce giant Flipkart, and food delivery firm Swiggy in Bengaluru. The survey is related to an alleged bogus input tax credit (ITC) connected to the external vendors of these firms, according to the sources.
A team of I-T Department officials have landed at the office of delivery firm Instakart Services, located at the Flipkart campus in Bengaluru. Since Wednesday, they have been conducting the survey which deals with an alleged bogus input tax credit connected to external vendors of Instakart, according to the sources.
“They are investigating Merlin and Surya Services, which are the third-party vendors for Instakart,” said a person familiar with the matter. “Due to these vendors, Instakart also got entangled into this situation.”
According to sources, the Directorate General of GST Intelligence (DGGI) running a countrywide campaign against GST (goods and services tax) evaders to reduce the abuse of the framework. Based on the insights found by DGGI related to GST invasion, the case was sent to the Income Tax Department to check income tax evasion.
A Flipkart spokesperson confirmed the survey was being performed by the I-T department and said that the company is facilitating full compliance.
“The officials from the income tax department have contacted us,” said a Flipkart spokesperson on Thursday night. “We are providing them with all the required information and are extending our full co-operation. We believe we are in full compliance with all applicable tax and legal requirements.”
In a related development, the I-T department officials have also landed at the office of food delivery and technology company Swiggy to conduct the survey. As per sources, due to a third-party vendor’s alleged default, the tax department has initiated a follow-up survey at Swiggy. A Swiggy spokesperson confirmed that the survey was being performed by the I-T department. "As a law-abiding company, we are in full compliance with the tax and legal mandates,” said a Swiggy spokesperson on Thursday night. “The survey by the I-T officials is currently underway and our team is extending full cooperation to the concerned authorities."
Flipkart and Swiggy are among the top home-grown e-commerce and food delivery companies out of India. Endorsing India’s continuing rise as a global hub of manufacturing, Flipkart’s parent Walmart said in December 2020 that it will triple its exports of goods from India to $10 billion each year by 2027. The US retail giant bought Flipkart for $16 billion in 2018. Last year, Walmart led a $1.2-billion investment in Flipkart, valuing the e-commerce firm at $24.9 billion. Flipkart has created lakhs of direct and indirect jobs till now, according to the sources.
After being severely impacted by the coronavirus pandemic, Swiggy is coming out of Covid-19 shadows. With people choosing to stay at home due to pandemic related restrictions and curfews in several cities, Swiggy which is valued at $3.6 billion is playing a key role to deliver food to the consumers.
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