Zomato Gets Tax Demand Order Of INR 2 Cr

Foodtech major Zomato has received a fresh goods and services tax (GST) penalty notice from Delhi’s sales tax officer, pertaining to fiscal 2018-19.

According to a regulatory filing to the stock exchanges, the demand order has been received in respect of excess availment of input tax credit for the year 2018-19, along with levying applicable interest and penalty.

As per the filing, the company has been asked to pay INR 2,22,91,376 for GST, along with additional interest and penalty charges totalling INR 2,31,27,300. 

In response to the show cause notice, the company provided clarifications on all issues, supported by relevant facts and documents. However, it appears that these were not fully considered by the authorities when passing the order.

“The Company believes that it has a strong case to defend the matter before the relevant appellate authority and does not expect any financial impact on the Company,” Zomato said in an exchange filing on Thursday (May 1).

The new tax penalty on Zomato comes days after the company received a GST notice of INR 11.8 Cr from Gurugram GST authority.

Earlier this month, it received two back-to-back tax notices of INR 23 Cr and INR 92 Cr from the Karnataka tax authority.

It is pertinent to note that Zomato is currently facing several tax-related challenges. In March, the foodtech major received a GST penalty notice from Gujarat’s Deputy Commissioner of State Tax for the fiscal year 2018-19. Additionally, in December last year, Zomato was issued a show cause notice amounting to INR 401.7 Cr by the Directorate General of GST Intelligence, Pune Zonal Unit. 

Meanwhile, on April 20, Zomato received the go ahead from the Indonesian government to liquidate its subsidiary in the Southeast Asian country.

On the financial front, the foodtech major continues to post healthy profit and revenue growth. Zomato more than quadrupled its net profit sequentially to INR 138 Cr in the quarter ended December 2023. On similar lines, its operating revenue jumped over 15% quarter-on-quarter (QoQ) to INR 3,288 Cr in Q3 FY24. 

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.