The income tax (I-T) department recently uncovered tax evasion amounting to approximately Rs 10,000 crore over a span of three years. The evasion is believed to have been carried out by online merchants who sell products through social media platforms like Instagram and Facebook.
Such 45 online retailer brands have been issued with notches by the Income Tax department. These notices have been sent to online retailers operating nationwide, and it is expected that similar notices will be sent to other companies soon. The aforementioned companies were found to have either evaded tax payments or underreported their incomes, as per the reports.
According to a senior official, apart from the major e-commerce firms, they are closely monitoring the Instagram and Facebook shops and have identified evasion amounting to around Rs 10,000 crore.
Between the end of October and November 15, the I-T department issued notices pertaining to the assessment years ranging from 2020 to 2022, as stated in the report. The official stated that they have notified approximately 45 such online retailers and plan to send notices to more in the upcoming months.
The report indicates that these 45 entities primarily deal in clothing, jewellery, footwear, bags and other items. The list includes prominent retailers who utilize social media platforms to reach their customers. Additionally, some of the companies that received I-T (Income Tax) notices were involved in international sales of their products.
India boasts the highest number of active Instagram users globally, with over 229 million, and also has a significant user base on Facebook, exceeding 314 million. Government officials highlighted that these 45 entities exhibit substantial turnovers, as per the report.
An official provided details about the sales conducted by these companies, stating that they primarily operate through Instagram with small shops and warehouses, yet they generated turnovers exceeding Rs 110 crore, while only reporting income tax returns of Rs 2 crore.
The majority of the payments received by these online retailers were facilitated through UPI, making it relatively easier for the Income Tax department to track these transactions.
