Amazon India is reportedly under the tax scanner again. Earlier it was about paying Value Added Tax (VAT) for transactions on its website. This time it is related to tax evasion by the online marketplace and traders.
Rs. 200 crore tax evasion
According to a recent news report, Amazon and dealers connected to the company have been accused of evading Rs. 200 crore taxes by misusing Cenvat (central value added tax) credit scheme.
The Directorate General of Central Excise Intelligence (DGCEI) body is examining Amazon’s accounts as well as of all the traders involved. A tax official confirmed that after inspecting Amazon’s offices including the Bengaluru head-office, some documents have been confiscated and statements of Amazon officials have been recorded.
Alleged Misuse of CENVAT Credit Scheme
This scheme is defined as ‘Under the Cenvat Scheme, a manufacturer of final product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product.’
The basic aim of CENVAT credit scheme is to eliminate or reduce the burden of excise duty on exports paid by traders. But tax officials discovered that traders associated with Amazon misused this credit facility.
Fake invoices of declared goods were issued by dummy companies to traders and officials believe that Amazon was aware of this activity. Another allegation is that Amazon apparently obtained goods from manufacturers at lesser price and assured to reimburse the difference by claiming Cenvat credit.
The probe is on and as of now there is no confirmation on Amazon’s involvement in this whole tax evasion episode.
No comments:
Post a Comment