In a complete flip-flop, Income Tax Appellate Tribunal (ITAT) has given relief to Flipkart from revenue authorities' demand of Rs 110 crore in taxes, reports The Economic Times. Paradoxically in February, the income tax tribunal had refused the Flipkart's appeal to stay the tax demand after the e-commerce platform was asked to reclassify discounts and marketing spend as capital expenditure. The details of the ruling have not been made public so it is unclear if this is a one-time tax amnesty or if the original ruling with regards to classification of discounts has been reversed. E-commerce companies categorise discounts and marketing costs as revenue expenses, spending on factory construction is considered a capital expenditure. With discounts being classified revenue expenses companies can show a net loss in earnings, therefore, be exempt from paying domestic taxes. The previous ruling reclassified discounts as capital expenditure which meant companies like Flipkart will be considered a profit making company and liable to pay taxes. The revenue authorities demanded taxes of about Rs 110 crore on an estimated profit of Rs 408 crore for the financial year 2015-16 when Flipkart originally reported a loss of Rs 796 crore. Note that in January also, Flipkart had lost an appeal against the Income Tax (IT) department over the above issue. The appeal had then been turned down by the Commissioner of Income Tax (Appeals), Bengaluru. Later Flipkart filed an appeal to ITAT, which was refused (Feb) to stay the tax demand. Flipkart asked the stay on tax demand “because…
Please subscribe to MediaNama. Don't share prints and PDFs.
You May Also Like
News
Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...
Advert
135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...
News
By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...
News
Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...