BENGALURU: Amazon has denied reports of the company paying $1.2 billion (Rs 8,456 crore) towards legal expenses during FY19 and FY20 stating that the claims by the traders body, Confederation of All India Traders (CAIT), is misleading.
CAIT earlier stated that the e-tailer has spent 20% of its overall revenues towards legal expenses during FY19 and FY20 while referring to data from the ministry for corporate affairs. An Amazon spokesperson said that its financial statements during the stated periods convey that legal expenses in fact constitute a miniscule part of the overall expenses.
“Given a misleading representation of a line item from our statutory filings on legal fees in a section of the media, we clarify that the line item is actually termed legal and professional expenses that includes not just the legal costs but also the costs related to other professional services such as outsourcing, tax consultants, customer research, logistic support services, merchant onboarding services, customer service cost, etc. For instance, for the year ended March 31, 2020, the legal fee was Rs 52 cr, from the total legal and professional expenses of Rs 1,967 cr,” a company spokesperson told this publication.
Top sources at Amazon said that in a market like India, Amazon has huge operating revenues and hence the professional expenses have increased during the last successive years. “There is no authenticity to the claims,” the sources said.
The CAIT earlier said that Amazon Inc’s various holding companies in India including Amazon India Ltd, Amazon Retail Private Ltd, Amazon Sellers Private Ltd, Amazon Transportation Services Pvt Ltd, Amazon Wholesale Pvt Ltd and Amazon Internet Private Services Ltd, spent an aggregate amount of Rs 5,126 crore and Rs 3,420 crore in FY19 and FY20, respectively, towards legal fees. These estimates suggest that the world’s largest retailer spent roughly around 20% of its overall revenues in FY19 and FY20 towards legal expenses. As per the data shared by CAIT, Amazon’s India subsidiary’s revenues for FY19 and FY20 was Rs 24,015 crore and Rs 18,070, respectively.