Fintech company Infibeam Avenues has received a tax demand and penalty notice totalling INR 32 Cr from Gujarat goods and services tax (GST) authorities.
In an exchange filing, the company said that the office of Central GST (joint commissioner common adjudicating authority CGST), Ahmedabad South issued the order, comprising tax demand of INR 16 Cr and a penalty of INR 16 Cr. The company received the notice on February 5.
In an order dated January 27, 2025, the GST officials disallowed certain GST exemptions claimed by the company on debit/credit card transactions, up to INR 2,000, between July 2017 and March 2024.
“Alleged disallowance of GST exemption claimed on debit /credit card transactions up to INR 2,000 vide sr. no. 34 of Exemption Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. The demand order is for the period from July 2017 to March 2024,” read the filing.
The exemptions pertain to the notifications issued by the finance ministry in 2017. Under this, services by an “acquiring bank” to any person for settlement of a single transaction up to INR 2,000, via credit card, debit card, charge card or other payment card service, attract zero GST rate.
The tax authorities appear to have rejected Infibeam’s contention that its transactions came under the ambit of these exemptions.
Infibeam said it believes that the demand is not “maintainable” and it is evaluating all options including filing an application for the rectification of the said order.
Making its case, Infibeam said that the recommendations of the 55th GST Council meeting clarified that Reserve Bank of India (RBI)-regulated payment aggregators (PAs) qualify as “acquiring banks” under the aforementioned 2017 notifications and are eligible for GST exemption.
“The company reaffirmed this position in its additional submission against SCN (show cause notice). However, the Order dated 27.01.2025 was passed without considering this crucial submission, leading to a mistake apparent on record, making the case fit for rectification under Section 161 of the CGST Act,” added the exchange filing.
Founded in 2007 by Vishal Mehta, Infibeam operates a full-stack B2B digital payments platform, which offers bill payment solutions through BillAvenue and digital financial services through Go Payments to large enterprises, MSMEs and governments.
It caters to clients across industries, such as Indigo, Vistara, Taj, ITC, MakeMyTrip, Jio, Airtel, Myntra, Indian Oil, ICICI Bank, among others.
The notice comes barely days after the company reported its financial results for the quarter ended December 2024. Infibeam Avenues reported a near 50% jump in its consolidated profit after tax (PAT) to INR 64.4 Cr in the third quarter (Q3) of the financial year 2024-25 (FY25) from INR 43.1 Cr in the year-ago quarter.
Meanwhile, operating revenue jumped 18% to INR 1,070.3 Cr in the quarter under review from INR 907.1 Cr in Q3 FY24.
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