Narayana Murthy's JV With Amazon Faces £5.5 mn Tax Demand
Following the report, Rishi Sunak, UK Chancellor and also the son-in-law of Naryana Murthy was forced to comment
Cloudtail India Pvt. Ltd, an online joint venture by Infosys co-founder N.R. Narayana Murthy firm, Catamaran Ventures, and Amazon is currently facing a £5.5 million (INR 55 crore) demand including interest and penalties, from Indian tax authorities after it paid a ‘meagre’ taxes in the last four years.
According to a report in The Guardian, Cloudtail, which enjoyed 35 per cent of total sales on the platform until 2019, is 76 per cent owned by the Murthy family whereas the remaining is directly owned by the US retail giant. Interestingly, Cloudtail’s two top posts such as chief executive and finance director have been held by Amazon executives. The Confederation of All India Traders separately has even written to India’s Union commerce minister Piyush Goyal to investigate why personnel from Amazon have joined Cloudtail.
The report came soon after the Indian competition commission received a nod to investigate Amazon's selling practices in India.
The Competition Commission of India (CCI) will now be examining complaints by a traders' group that small sellers are being driven out of business because the big US platforms are giving preferential treatment to "preferred sellers".
In the fiscal year 2020, Cloudtail secured a revenue worth INR 11,412 crore. However, Amazon has said that it's operating in full compliance with local laws.
Following the report, Rishi Sunak, UK Chancellor and also the son-in-law of Naryana Murthy had to comment. Interestingly, the report also came after Sunak led G7 finance ministers agreed on “seismic tax reforms” which ensures companies pay taxes in countries they are doing business.
"The Chancellor's consistent position has been that it matters where tax is paid, and any agreement must ensure digital businesses pay tax in the UK that reflects their economic activities. That is what our taxpayers would expect and is the right thing," a spokesperson for the UK Treasure office told the daily paper.