Amazon Traders Alleged Of $30 Mn Tax Evasion

Amazon Traders Alleged Of $30 Mn Tax Evasion

According to a report in a leading daily, ecommerce giant Amazon and the traders associated with it have been alleged of tax evasion of about $30 Mn (INR 200 Cr.) by misusing Cenvat (central value added tax) credit facilities. The Directorate General of Central Excise Intelligence (DGCEI) is investigating their accounts.

Search operations were recently conducted at Amazon’s business premises including its India headquarters in Bangalore. A tax official said that they have seized some documents and recorded statements of Amazon officials.

According to Cenvat scheme, a manufacturer can claim Cenvat credit (at 12.5%) on amount spent on purchase of raw material,  which can later be utilised for payment of central excise duty.

During the probe, the investigators found that non-existent dummy firms were issuing bogus invoices of declared goods to traders. Officials suspect that Amazon was aware of this.

“It’s prima facie a violation of the said norms. However, it is not correct to drag the ‘aggregators’ for the frauds committed by the traders,” said a tax expert.

At the same time Amazon is also alleged to have taken the goods from manufacturers/traders at lower price and accused of promising them to compensate the difference by claiming Cenvat credit. The accusations have not been proved yet and the probe is still underway.

We have reached out to Amazon for a comment on the development and await their response.


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Author

Aparna Mishra

Inc42 Staff

After a 2-year-stint at Ernst & Young, Aparna moved to Journalism. Her prior experience enables her to understand business management. An avid reader and a traveller she hopes to gain insights on the startup ecosystem at Inc42.

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