Thursday, October 21, 2021
News

Amazon's denial of high legal expense in India raises more Qs than As

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

New Delhi | Friday, 2021 11:45:05 AM IST
Amazon has been of late and also for sometime now making some contradictory statements about its legal expenses in India. The company has claimed that it incurred a meagre expense of Rs 52 crore towards legal fees in FY20.

This is out of the total expense of Rs 1,967.5 crore shown as "legal professional charges" in financial statements of Amazon Seller Services Private Limited as sourced from the website of Ministry of Corporate Affairs. Amazon Seller Services Private Limited is among the myriad subsidiaries the company operates in India.

The online retailer has stated that "legal professional charges" incurred by it in FY20 include professional services such as customer research, merchant onboarding services, customer service cost, outsourcing, tax consultants, logistic support services, etc.

This is misleading given that Advertising promotional expenses is a separate line item in the company's financial statements, and it typically includes expenses associated with customer acquisition and marketing. Payment to consultants for taxation matters and audit services are also included in the separate line items in its financial statement.

It is worth noting that Amazon Seller Services Private Limited has spent Rs 2,640.3 crore under Advertising promotional expenses in FY20, up 13.28% from Rs 2,330.7 crore in FY19. The total expenses related to "legal professional charges" for FY19, and FY20 is a stupendous Rs 3,407.6 crore, that is possibly larger than the combined revenues of leading law firms in the country.

The statement made by Amazon with regards to its legal expense in India does not hold water for anyone who is informed. It is incumbent on the company to explain to what effort it has spent Rs 3,407.6 crore from one subsidiary alone towards what it has accounted for as legal professional charges'.

Amazon has been at the centre of controversy after reports of bribery charges against its legal representatives and associated legal firms in India. The company is facing an inquiry by the Competition Commission of India (CCI) over alleged anti-competitive practices and a parallel inquiry by Enforcement Directorate for violation of domestic laws.

The Directorate General of Goods and Service Tax Intelligence (DGGI) has also issued a show cause notice to one of its subsidiaries, Cloudtail, for evasion of GST and indirect taxes. Amazon has also legally challenged Future Group's deal with Reliance Retail to sell its retail, wholesale, logistics, and warehouse businesses to Reliance Retail Ventures.

--IANS san/in

( 413 Words)

2021-09-24-11:16:03 (IANS)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE BUSINESS NEWS
Energy prices must be predictable, depen...
Physics Wallah and its aim to provide a...
5 Eligibility factors that can affect yo...
A two-year-old baby slipped into coma du...
Get ready to celebrate #BharatKiDiwali w...
Wave Estate to launch 150 luxury residen...
More...
 
INDIA WORLD ASIA
Delhi's air quality deteriorates to 'poo...
Telangana IT Minister KTR interacts with...
Class 7 student thrashed to death by sch...
Hyderabad: 'Mini Numaish' exhibition pro...
India reaching 100 cr COVID-19 vaccinati...
India crosses landmark 100 crore COVID-1...
More...    
 
 Top Stories
TVS Motor Company Wins India Green ... 
Gully Network is building India's l... 
Bhutan PM congratulates India for c... 
'100 cr not just a number but self-... 
Kejriwal lauds healthcare, frontlin... 
Dr RS Sharma lauds role of CoWIN ap... 
Physics Wallah and its aim to prov... 
Gauri Lankesh murder case: SC resto...