income tax department is said to have detected tax evasion of nearly Rs 10,000 crore over a three-year period by etaliers selling goods via social media platforms such as Instagram and Facebook. The department has sent intimation notices to 45 such pan-India brands with more to follow.
They were either not paying tax or had underreported it, ET has learnt.
“Apart from the large ecommerce companies, we are closely monitoring the shops on Instagram and Facebook and have detected evasion to the tune of about Rs 10,000 crore,” a senior official told ET.
The notices were sent between the last week of October and November 15 and are for assessment years from 2020 to 2022.
“We have sent intimation notices to about 45 such e-tailers and will send notices to more in the coming months,” the official said, adding that none of these are large ecommerce companies.
The 45 include 17 that sell apparel, 11 that sell jewellery, six that sell footwear and bags, five that sell local fashions, and four that sell home décor and furnishings. The rest sell gifts and other items. The list includes some prominent retailers that use social media to reach a larger audience, said the official without disclosing names. Many of them were also sending their products abroad, the person added.
High sales, low tax
India has over 330 million active Instagram users, the most in the world. The country also has the highest number of Facebook users at over 380 million.
After Covid, there was a surge in the number