Cloudtail, a joint venture by Catamaran Ventures and Amazon, gets a tax claim of Rs 54.5-crore along with interest and penalties from the Directorate General of Goods and Service Tax Intelligence (DGGI). Catamaran Ventures is owned by Infosys co-founder N.R. Narayana Murthy.
About the Cloudtail service tax case
The exact details of the case are not made public; Cloudtail is reported to have received a showcase notice back in 2018 from the Directorate General of Goods and Service Tax Intelligence (DGGI) for Rs 54.5 crore as service tax demand, including certain interest and penalties. As for now it has been considered as contingent liabilities as on March 31, 2020.
A Cloudtail spokesperson made a statement in a recent interview and said that-
“Cloudtail has disputed the service tax claim by the authorities and the matter is before the adjudicating authorities. Cloudtail has been disclosing this as a contingent liability in its Annual Report since 2019 as per Indian Accounting Standards. Since this matter is sub-judice we are unable to comment any further. Cloudtail reiterates that it is in full compliance with the laws of India.”
Tax notices being claimed to companies; is it because of pre-GST?
Service tax, an indirect tax levy, got under covered as GST after its final approval in July 2017. Tax authorities have since then sent several notices to companies and banks pertaining to service tax matters.
Earlier this year, just before the financial year 2020-21 came to an end, a series of tax notices and summons were sent out to taxpayers from the indirect tax authorities located in Mumbai and some other tax zones around the country.
According to exclusive media reports, Cloudtail reported revenue of Rs 11,413 crore for financial year-20, an increase of 27.76 per cent compared to Rs 8,945 crore reported the previous year. The company posted a profit of Rs 67.5 crore for financial year-20.
About Cloudtail India
Cloudtail is one of the biggest sellers on Amazon India marketplace and is a joint-venture between Infosys co-founder N.R. Narayana Murthy’s Catamaran Ventures and Amazon India.
Cloudtail is owned by a holding company Prione Business Services, which is owned 76% by Catamaran Ventures and 24% by Amazon.
Prior to 2019, Amazon held 49% stake in Prione, but had to reduce its stake to comply with India’s FDI norms.