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GST Evasion: DGGI Hyderabad Issues Notice To Swiggy For Wrongful Availment Of ITC

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In a case on alleged GST evasion of wrongful availment of input tax credit to the tune of Rs 27.2 crore, the Director-General of GST Intelligence (DGGI), Hyderabad has issued a notice to the operator of food delivery app Swiggy.

The DGGI also asked why a penalty should not be levied on the company, directors and top finance heads of BTPL. Bengaluru-based BTPL is engaged in delivery of food, beverages, groceries and supplies from its own private kitchens, cloud kitchens and other restaurants. They are registered across the country with 88 active GSTIN registrations as a regular taxpayer, e-commerce operator, and input service distributor.

In the notice, the DGGI said: “An amount of Rs 27.2 crore is availed as input tax credit fraudulently by BTPL in various states without receipt of goods, services and in contravention of the Act between August 2017 and October 2019.” Invoices of Noida based company, Green Finch Team Management Private Ltd (GTMPL), were used without any actual receipt of the services, it said. Investigations also revealed that GTMPL have themselves wrongfully availed input tax credit on invoices issued by a set of fictitious and non-existent companies such as Orient Enterprises, Royal Enterprises, and Liya Trading Services and utilized the same while discharging their output tax liability towards invoices issued to BTPL. 

BTPL has availed and utilized input tax credit on input services commonly used for its online marketplace services (which attract 5% GST without input tax credit) as well as taxable services but it has not reversed the proportionate input tax credit corresponding to private and cloud kitchens,” the DGGI explained.


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TaxGyata Team

TaxGyata Team