Karnataka HC orders tax department to pay Flipkart Rs 16 crore in cash, here’s why

The Karnataka High Court has ordered the state’s commercial taxes department to refund ₹16.1 crore in cash to e-commerce platform Flipkart. The amount represents 70% of a pre-deposit the company made in response to a tax demand. Justice S.R. Krishna Kumar also directed the department to pay applicable interest on the total deposit of Rs 23 crore. The case dates back to reassessment orders from 2016-17, under which the department classified mobile phone chargers as “unscheduled commodities” and imposed a higher tax rate, resulting in a demand of Rs 23 crore from the Walmart-backed e-tailer. Flipkart challenged the demand and made a pre-deposit, paying a portion in cash and the remaining Rs 16.1 crore using input tax credit (ITC) from its electronic credit ledger (ECL).