Cloudtail, a joint venture between Amazon India and Infosys co-founder NR Narayana Murthy's Catamaran Ventures, is facing a tax demand in India.
Cloudtail, a seller on Amazon, is facing a tax demand of GBP 5.5 million (Rs 54.5 crore) from Indian authorities, The Guardian has reported.
According to the report, the company's most recent accounts state that it "received a show cause notice in the current year from Directorate General of Goods and Service Tax Intelligence amounting to INR 5,455 lakhs (£5.5m) along with interest and penalties for service tax-related matters."
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The report did not specify the details of the tax dispute. The company told The Guardian it is challenging the tax demand, and said "since this matter is sub judice, we are unable to comment any further."
Moneycontrol could not independently verify the report.
In February 2019, Murthy's Catamaran Ventures had raised its stake in Prione Business Services, Cloudtail's parent company, to 76 percent from 51 percent.
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After the transaction, Amazon's stake in Cloudtail lowered to 24 percent from 49 percent. New rules in India had said online marketplaces cannot sell products of their group companies on their platforms.
Cloudtail has paid "meagre" taxes over the past four years, according to the investigation by The Guardian. The report said Cloudtail paid GBP 830,000 in tax per annum compared with the average revenue of GBP 798 million over four years.
The Karnataka High Court on June 11 dismissed petitions by Amazon and Walmart-owned Flipkart against an investigation by the Competition Commission of India (CCI), effectively letting the authority go ahead with the probe.