The Director General of GST Intelligence (DGGI) has issued a show cause notice to e-commerce major Amazon India over alleged wrong claim of input tax credit (ITC) which has reportedly been calculated to about Rs 175 crore.
This came after the days, the income tax (I-T) department had surveyed top tech companies such as Flipkart’s arm Instakart, Swiggy, Uber and Ola.
The surveys are related to an alleged bogus input tax credit connected to the external vendors of these firms.
It is important to note that a nation-wide drive has been initiated by the GST intelligence wing to plug tax leakages.
Why the notice served?
During the investigation of Director General of Goods and Services Tax Intelligence (DGGI) it has allegedly found that Amazon has made calculation errors.
Amazon had paid higher goods and services tax (GST), for which it should have claimed refund, instead, it wrongly claimed ITC on the pretext of higher tax slab.
The demand is for the interest due on the wrongly claimed ITC.
Thus, the notices have been sent to Amazon’s Bengaluru office.
Tax official commented
“Amazon pays GST and should claim refund in case of any excess payment.
But they instead claimed excess input tax credit for the GST paid on purchases from their vendors.
Technically its wrong as they can only claim the ITC which is available.
Now, Amazon has to pay the interest on the excess ITC it claimed.”
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