Flipkart, Swiggy face tax survey

BENGALURU/NEW DELHI: The income tax (I-T) department is conducting surveys at the Bengaluru offices of top e-tailer Flipkart and food delivery firm Swiggy since Wednesday on suspected tax evasion by their third-party vendors, three people aware of the matter said on Thursday. The surveys are part of a nationwide drive by the tax department against firms and vendors suspected of tax evasion. “For both companies, due to a third-party vendor default, these surveys are being conducted at the offices of these startups. The I-T department is asking for financial statements and trying to understand the payments made to these vendors,” one of the three people cited above said seeking anonymity. InstaKart Services Pvt. Ltd, Flipkart group’s logistics and freight company, is under survey on suspicion that two vendors providing manpower services to it evaded taxes, the people mentioned said.

“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.

The tax department is also questioning some employees of Swiggy for suspected tax evasion by one of its vendors.

“As a law-abiding company, we are in full compliance with the tax and legal mandates. The survey by the I-T officials is currently underway and our team is extending full cooperation to the concerned authorities,” a Swiggy spokesperson said.

The surveys pertain to suspected tax evasion involving bogus input tax credits, a government official said.

“It is a limited exercise of information gathering, not a search,” the official said. Surveys, such as the ones at Flipkart and Swiggy, are less extensive than searches and are done only during business hours.