Flipkart under preliminary tax probe for allegedly recasting marketplace fees as transport charges

Tax officials are examining whether Flipkart changed its billing model to claim lower GST rates by classifying online marketplace commissions as transport services. Experts warn such restructuring could trigger tax recovery, interest, and penalties if deemed intentional.

Flipkart is under preliminary investigation over allegations that the Walmart-owned online marketplace altered its billing structure in a way that could reduce its goods and services tax liability, two tax investigators said.

Flipkart allegedly rejigged its billing model by recasting marketplace fees collected from its vendors as transport charges to claim lower GST rates applicable to goods transport agencies by shifting revenue to a category meant for small road transporters.

Source : https://www.livemint.com/companies/flipkart-gst-probe-billing-practices-11756188756423.html