Tax Evasion: Byju's Parent Company Under Scrutiny of GST Intelligence Wing
Think & Learn Private Limited (TLPL) i.e. the parent of Bengaluru-based Byju's, is under the scanner of the GST intelligence wing for evading tax worth Rs 43 crores.
Edtech unicorn Byju's is faced with two cases for alleged tax evasion of around Rs 43 crore and has been asked to respond to show-cause notices detailing the alleged violations. It has been asked to respond to show-cause notices detailing the alleged violations.
On 31 December 2020, the Goods & Services Tax Department (GST department) had sent show-cause notices (SCN) to the company regarding the cases it has opened against it.
According to the SCN, the TLPL had manufactured and cleared excisable goods including tablets without disclosing the same to the GST department by way of written intimation, and without assessing, and paying the appropriate amount of Central Excise duty on the said goods, and thereby they have contravened the provision of the Central Excise Act.
The investigation pertains to the manufacture and sale of books, tablets, and SD cards that Byju's provides its students, people familiar with the matter said. The GST department believes the unicorn failed to disclose information about these items, and thus attempted to evade paying taxes, one of the persons said, asking not to be named.
Blank SD cards are purchased by customers who can be anyone for the sake of recording content as per their choices whereas the recorded SD cards sold by TLPL are purchased only by students of TLPL because it is of meaning and use only to them. Thus the process carried out by TLPL has transformed an ordinary blank SD card into an educational aid that is of use to students.
It was engaged in commercial training coaching services (CTCS), according to tax authorities. TLPL was offering various modes of 'CTCS' and students had the option of receiving coaching through the mode of their choice. It had allegedly did not pay taxes between October 2014 and June 2017.
The intelligence wing of the GST department opened an investigation into the company for the period between March 2015 and June 2017. On 2 July 2018, the department had conducted searches on Byju's premises and recovered a pen drive allegedly containing data relevant to its investigation.
The GST department has alleged liability of around Rs 18.81 crore payable until 31 March 2021.
The Notice provides, "The total Service Tax evaded on the "Books" portion reading material provided in the course of the coaching service of provision of "CTCS" by way of "Model 1" during the period from October 2014 to June 2017 totally amount Rs 18.87 crore".