Why have there been tax raids on Swiggy and Flipkart over tax irregularities? How do you see the impact of all this?

In the midst of a series of tax raids across their offices in India, both Flipkart and Swiggy denied any wrongdoing. Most of the irregularities apparently pertain to alleged tax irregularities of their third-party vendors. These pertain to wrongful input tax credit or ITC claimed by such companies. Both Swiggy and Flipkart denied allegations of tax evasion.

The investigations pertain to alleged GST default by two manpower service providers of InstaKart, a wing of Flipkart. Both Swiggy and Flipkart have confirmed that they were cooperating with the authorities. It emanates that some of them had claimed bogus input tax credits. The Income Tax department has completed its survey of InstaKart.

Both Flipkart and Swiggy have confirmed that all GST invoices had been paid only through proper banking channels. InstaKart has claimed that it paid GST worth Rs.20.12 crore to vendors against the tax invoices issued to it entirely in compliance with GST laws. Even Swiggy had strongly denied allegations that it was complicit in wrongdoings by its vendor tht had availed bogus input tax credit.