Infibeam Avenues faces Rs 32 Cr GST demand; plans to appeal
Infibeam Avenues reported a 50% year-over-year increase in profit to Rs 64.4 crore in the quarter ended December 2024.
Indian fintech firm Infibeam Avenues has received a tax and penalty order totalling Rs 32.01 crore from the Office of Central Goods and Service Tax, which it plans to challenge, citing a “mistake apparent on record.”
The company alleges that the order, issued in Ahmedabad South on January 27, wrongly claimed GST exemptions on debit and credit card transactions under Rs 2,000 between July 2017 and March 2024.
The demand includes Rs 16 crore in tax and an equal amount as a penalty, according to the exchange disclosures filed on Thursday.
Infibeam, however, contends that the order "was passed without considering" a key clarification from India’s GST Council. In a regulatory filing, the company noted that the 55th GST Council Meeting explicitly stated that RBI-regulated payment aggregators qualify as "acquiring banks" under Entry No. 34 of Notification No. 12/2017, making them eligible for exemption.
An acquiring bank is a financial institution that processes credit and debit card payments on behalf of merchants. In simple terms, it "acquires" the funds from the customer's issuing bank and ensures that they are settled into the merchant’s account.
“The Company reaffirmed this position in its additional submission against the Show Cause Notice," Infibeam stated in the filing. "Based on the Company’s assessment, the aforesaid demand is not maintainable," the filing said.
The Mumbai-listed firm said it is “evaluating all options,” including seeking rectification under Section 161 of the CGST Act, which allows corrections for errors evident on record. It emphasised that the demand "did not envisage any relevant impact on financials, operations, or other activities of the Company."
On Tuesday, Infibeam Avenues reported a 50% year-over-year increase in profit to Rs 64.4 crore in the quarter ended December 2024. Revenue from operations climbed to Rs 1,070.35 crore. On a sequential basis, revenue grew 5.28% from Rs 1,016.65 crore in the previous quarter, while profit jumped 35.66% from Rs 47.47 crore.
Edited by Kanishk Singh
