Income Tax panel has refused to stay the $17.2 Mn (INR 110 Cr) tax penalty on ecommerce major Flipkart on behalf of the tax assessed for FY15-16.
According to IT officials, Flipkart generated a profit of $63.52 Mn (INR 408 Cr) for FY15-16, while the company originally reported a loss of $124 Mn (INR 796 Cr) for the said financial year.
Flipkart has been asked by the Income Tax Appellate Tribunal (ITAT) in Bengaluru to deposit $8.5 Mn (INR 55 Cr) as tax and $8.5 Mn (INR 55 Cr) as a bank guarantee by February 28, 2018.
The tax has been levied on the recent discretion of the Income Tax department to make the ecommerce companies reclassify discounts and marketing spend as capital expenditure.
Earlier, in January 2018 reports surfaced that Flipkart has lost an appeal against the Income Tax (IT) department over the above issue. Later Flipkart filed an appeal to ITAT, which has now also refused to give the ruling in favour of Flipkart.
As per reports, Flipkart asked the stay on tax demand “because it would cause financial hardships for the company”. However, ITAT refused Flipkart’s plea on the ground that “prima facie, there was no financial hardship.”