₹206 crore Messi funding row: GST team issues notices to two finance firms

Thiruvananthapuram: The Kerala GST department’s special investigation team has issued notices to two private financial institutions after finding that the ₹206 crore handed over by a sponsor to bring Lionel Messi and the Argentina team to Kerala may not have been the sponsor’s own money.

The investigation found that Hinduja Leyland Finance provided ₹73.23 crore and Gokulam Chit & Finance ₹133.64 crore to the sponsoring company. The two institutions have been asked to submit details of the transactions within a week.

The GST department has noted that both are Non-Banking Financial Companies (NFBC), raising questions over the transactions. Investigators are seeking to know on what basis such large amounts were given to a sponsoring company with a paid-up capital of only ₹10 lakh. They have also asked whether any assets were provided as security and who facilitated the arrangements.

The department is also examining whether the sponsoring company had offered an advertising contract or any other service in return, whether the money was repaid, and, if so, to whom, when and from what source.

The GST department had earlier found that the money handed over by the sponsor did not come from the taxpayer’s own business income or capital. Investigators also found no evidence to establish that the amount was a regular commercial loan.
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If the money was a loan, an 18 per cent taxable processing fee would normally be charged. However, there was no indication that the ₹206 crore transaction involved interest payments or tax deducted at source (TDS). The investigation also found that the money was transferred to other accounts soon after being credited.

This has raised suspicion that the sponsor’s account may have been used as an intermediary account in the transactions.