Delhi HC Orders Tax Authorities To Process Flipkart’s VAT Refund

The Delhi High Court on Monday (August 21) asked the tax authorities to process Flipkart India’s value-added tax (VAT) claim of INR 6.63 Cr within three weeks. The ecommerce major will also be eligible for the interest accumulated since 2015.

The high court also criticised an officer of the VAT department for acting against the clear mandate of processing VAT refunds within two months. A division bench of Justices Yashwant Varma and Dharmesh Sharma said, “…we note that the respondents (VAT tax officer) clearly appear to have acted arbitrarily in making numerous adjustments post-May 31, 2015 and, thus illegally depriving the petitioner (Flipkart) of the refund as claimed.”

Flipkart moved to the Delhi High Court seeking a direction to the VAT department to process its August 2020 application for a refund of around INR 6.63 Cr with interest.

The application was filed on the ground that Flipkart’s refund application of March 31, 2015, was liable to be decided within the statutory period of two months as prescribed in Section 38(3)(a)(ii) of the Delhi Value Added Tax Act, 2004.

In 2015, the ecommerce giant submitted a revised return for the quarter ended March 31, 2014, and sought a refund of more than INR 11.40 Cr. However, the DVAT officer adjusted the refund claim amount against other tax demands raised later than two months.

Meanwhile, Flipkart continued to deliver strong performance, as indicated by Walmart during its Q2 results. Without disclosing the numbers, the retail giant’s CFO John David Rainey said Flipkart remains focused on delivering continued contribution profit improvement while also expanding the ecosystem of its products and services like advertising, travel, and health care.

The ecommerce giant has also recently launched an app-in-app fashion vertical, SPOYL, targeted at Gen Z customers. SPOYL will be a vertical within Flipkart’s app and will feature more than 40,000 products across categories such as western wear, accessories and footwear.

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