Two weeks after GST intelligence accused Flipkart subsidiary Instakart of availing fraudulent input tax credit worth Rs 21 crore since July 2017, the Income Tax department has conducted surveys on Instakart's and Swiggy's head offices in Bengaluru.
Instakart said they were cooperating fully with the investigation. “The officials from the Income Tax Department have contacted us. 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,” Flipkart Spokesperson told ANI.
Instakart is a subsidiary of Walmart-owned Flipkart. It functions as the logistics arm of Flipkart, which formed the entity out of the logistics business of WS Retail Services which it acquired in 2015.
Instakart had earlier denied the claims that it was availing of bogus input tax credit. A spokesperson told Financial Express that the investigation by the GST Intelligence wing “concerns the non-payment of GST by two vendors. We are merely cooperating with the authorities to help with their findings to trace and track any wrongdoings by such vendors,” the spokesperson said.
“We have paid each and every invoice of these vendors through banking channels and all documentary evidence has already been submitted to the department. The investigation is not to be misconstrued as being related to any wrongdoing by us — any such allegation is vehemently denied by us,” the spokesperson added.
The move comes after a massive government crackdown on GST evaders, with action taken against 7,000 entities until January 3, while 187 had been arrested earlier, Finance Secretary Ajay Bhushan Pandey said on Sunday.
The government netted a record GST collection of Rs 1.15 lakh crore in December 2020, helped by the action against tax evaders alongside pick up in the economy.
In an interview to PTI, Pandey said action against fake invoicing racket in last one-and-a-half months has led to arrest of 187, including five chartered accountants and one company secretary.
"Many of them including some managing directors are in jail for last 40-50 days. There are few large companies which too are found involved in taking fake bills through multiple layers, thereby evading GST and income tax. So they have also been booked," he said.
The action against those who try to misuse the system, he said, has been based on collating information from various agencies such as Income Tax Department, Customs unit, FIU and GST department and banks.
With inputs from PTI
