I-T dept surveys Flipkart arm, Swiggy on charges of tax evasion by associated vendors

The Income Tax Department has conducted surveys on a subsidiary of e-commerce major Flipkart and food ordering platform Swiggy on charges of bogus input tax credit (ITC) claim and tax evasion by some vendors linked to them, official sources said on Thursday.

The two firms told PTI they are cooperating with the tax authorities and that they are in full compliance with the law. Tax officials said the action was undertaken at the offices of the two entities-- Instakart and Swiggy - in Bengaluru, apart from the office locations of the associated vendors, on Wednesday and Thursday. Instakart is the entity that runs Flipkart's logistics arm Ekart. The action is related to charges of bogus ITC claims under the GST regime and related tax evasion, they said.

The probe is primarily against the vendors who are on the platforms of these e-commerce majors but a proper and evidence-based investigation required the tax department to survey the offices of the two companies for collection of documents and understanding the subject matter, sources said.

They said the tax department undertook the action after it got inputs of Goods and Services Tax (GST) evasion by certain companies from their sister agency, the Directorate General of GST Intelligence (DGGI). "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," an spokesperson for Flipkart said. A Swiggy spokesperson said they are "a law abiding company and 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 in the matter," the spokesperson added.