Amazon India Vendor Tax Dispute of ₹56 Crores

According to The Guardian’s report on Monday, one of Amazon India’s top sellers, Cloudtail India, has been taken to court for a tax dispute of ₹56 Crores.

Amazon India and Catamaran Ventures, which belongs to the Co-founder of Infosys, Mr NR Narayana Murthy, are the two who collaborated to form Cloudtail.

It was from the company’s latest annual report from where the British newspaper discovered this tax dispute of Cloudtail.

It is very common for big e-commerce companies and their vendors to encounter tax demand related matters. The tax department is the one that usually demands claims on E-tailers and online merchants.

In a statement to ET, Cloudtail’s spokesman said that the company had undergone a dispute related to service tax. Since 2019, the company is disclosing this dispute in its annual report as their liability according to the Indian accounting standards.

This Amazon India’s vendor refused to say anything else on the matter as the case is before the court. Still, they announced that they abide entirely by the Indian law and do business in compliance with it.

In India, the foreign direct investment (FDI) laws have been reformed in 2019 for E-commerce. Amazon India releases its stake to 24% from 49% in Prione Business Services before the rules improved.

Amazon India vendor Cloudtail is a subsidiary of Prione Business Services. The company has recorded a revenue of ₹11,413 Crores in the financial year 2020, which is 28% higher than last year. It also recorded a 130% rise in its net profit to ₹68 Crores.

In an advisory warning in 2020, Haryana’s excise and taxation department has ordered the companies to make amendments in their GST registration if they are changing the place where they do their business about the same.

Cloudtail failed to follow this advisory and, as a result, was demanded a tax of ₹56 crores.

According to the department, there was no Amazon India vendor Cloudtail business premise while doing a routine physical verification.