Flipkart and Swiggy offices under IT scrutiny

The Income Tax Department on Friday concluded its ongoing survey at the offices of online food aggregator Swiggy, and InstaKart, a Flipkart unit for logistics and freight services. 

The surveys began on Wednesday. Swiggy has confirmed the development to Techcircle. 

A source close to one of the companies told TechCircle that the survey was linked to two third party vendors working with the companies.  “Due to a third party vendor’s alleged default, the tax department had initiated a follow-up survey at Swiggy,” the source added.

The vendors were being checked for the invoices generated against the payments made to both the companies on the suspicion of input tax credit and related tax evasion.

The companies -- Merlin Facilities and Surya Team Management-- had supplied manpower or staff to the companies. Both the companies do business worth Rs 300-400 crore with these vendors. Further, the vendors have been accused of generating bogus invoices to avail input tax credit without having paid goods and services tax, according to a report by The Economic Times. 

“As a law abiding company, we are in full compliance with the tax and legal mandates. Our team extended full cooperation to the concerned authorities during the survey,” Swiggy spokesperson told TechCircle.

"We believe we are in full compliance with all applicable tax and legal requirements," a spokesperson for Flipkart said in a statement. 

Emails seeking further clarification on the matter went unanswered at the time of publishing this article. 

The surveys are a part of the larger nationwide drive taken up by the tax department against firms and vendors evading GST.