British Chancellor attracted to RRN, Amazon tax dispute

BENGALURU: UK Chancellor and NR Narayana Murthy’s son-in-law Rishi Sunak has been embroiled in a service tax dispute involving Murthy’s Cloudtail business on Amazon, forcing his office to issue a statement on taxes payable by digital businesses.
An article in UK publication The Guardian on Monday said that Cloudtail, a joint venture between Murthy’s Catamaran Ventures and Amazon, faces a demand of 5.5 million pounds (around 55 crore rupees), including interest and penalties, of from the Indian tax authorities. Cloudtail, one of the biggest sellers on, achieved a turnover of 11,412 crore rupees in fiscal year 2020.
The report came days after Sunak praised the “seismic tax reforms” agreed by the world’s richest economies at the G7 finance ministers’ meeting, to charge companies in the countries where they do business. .

A spokesperson for the UK Treasury Office told The Guardian: “The Chancellor’s constant position is that it matters where tax is paid, and any deal must ensure that digital businesses pay UK tax that reflects their economic activities. This is what our taxpayers would expect and it is the right thing.
Cloudtail said he received a notice of justification from the Goods and Services Tax Intelligence Directorate (DGGI) dated December 27, 2018, in the amount of Rs.54.5 crore, along with interest and charges. penalties applicable for matters related to the tax on services. This has been considered a contingent liability as at March 31, 2020.
Cloudtail told TOI that he disputed the service tax claim and that the matter was before the contracting authorities. “Cloudtail has disclosed this as a contingent liability in its annual report since 2019 in accordance with Indian accounting standards. As this matter is pending, we are unable to comment further. Cloudtail reiterates that it is in full compliance with the laws of India, ”the spokesperson said.

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