GST Authorities Slap INR 2.59 Cr Penalty On Zaggle

SUMMARY

Zaggle has been slapped with a penalty of INR 2.6 Cr by the Additional Commissioner, Rangareddy, Telangana under the IGST Act

The company said it plans to challenge the penalty, stating it expects a favourable outcome at the appellate level and does not foresee any material financial impact

Founded in 2011 by Raj Narayanam, Zaggle is a fintech SaaS platform which provides a spend management and corporate employee benefits platform

Fintech SaaS company Zaggle has been slapped with a penalty of INR 2.6 Cr by the Additional Commissioner, Rangareddy, Telangana under the IGST Act.

In an exchange filing, the company said, “Company has received the summary of order dated February 25, 2025 imposing a penalty under IGST Act, 2017 amounting to INR 2,59,32,290 from Additional Commissioner, Rangareddy, Telangana in relation to the assessment proceedings conducted for overriding commission for the financial year 2017-18.”

The order, dated February 25, 2025, cites violations under the IGST Act, 2017.

The company said it plans to challenge the penalty, stating it expects a favourable outcome at the appellate level and does not foresee any material financial impact.

Founded in 2011 by Raj Narayanam, Zaggle provides a spend management and corporate employee benefits platform. Its offerings help businesses automate their accounts and issue prepaid cards. Its portfolio of SaaS products also includes tax and payroll software.

The company made its stock market debut in 2023, with its shares listing flat at INR 164 apiece on the BSE.

The company recently secured a series of contracts, including a three-year contract from Honasa Consumer, the parent of Mamaearth, to provide its Zaggle Zoyer Platform to help the D2C company streamline and automate recurring expenses across multiple branches and stores.

Additionally, it also won a five-year contract from Gujarat International Finance Tec-City Company Limited (GIFTCL) to offer solutions for a co-branded prepaid citizen card and visitor management system.

On the financial front, Zaggle reported a 30% jump in its Q3 FY25 consolidated net profit to INR 19.74 Cr from INR 15.22 Cr in the year-ago period. Revenue from operations increased 69% to INR 336.89 Cr in Q3 FY25 from INR 199.51 Cr in the year-ago quarter.

In December last year, Zaggle raised INR 595 Cr via a qualified institutional placement (QIP). The company has been on an acquisition spree for the last few months to shore up its top and bottom lines.

Shares of Zaggle ended Tuesday’s (February 25) trading session 1.6% higher at INR 359.6 on the BSE.