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Zomato Receives Rs 9.5 Crore Tax Demand, Plans to Appeal Against Order

• ByStartupStory     |    July 1, 2024

Zomato, a leading food delivery and quick commerce company, announced in a regulatory filing that it has received a tax demand notice amounting to Rs 9.5 crore from the Karnataka commercial tax authority. This amount includes interest and penalties.

The company has stated its intention to appeal against this demand. In a regulatory filing, Zomato expressed confidence in its case, saying, “We believe that we have a strong case on merits, and the company will be filing an appeal against the order before the appropriate authority.”

The tax order pertains to the audit of GST returns and accounts for the financial year 2019–20. The notice was issued concerning the excess availability of input tax credit and the corresponding interest and penalty. Zomato elaborated in its filing that the company had clarified the issue in response to a showcause notice, along with providing relevant documents and judicial precedents. “We clarified on the issue along with relevant documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order,” the company stated.

Despite the tax demand, Zomato has reassured stakeholders that it does not foresee a significant financial impact. In a company statement, Zomato emphasized, “We do not believe that this would have a financial impact on the company.”

This is not the first instance of Zomato receiving tax notices. On April 20, 2023, the food delivery giant received a tax notice amounting to Rs 11.82 crore. The demand order related to GST on export services from July 2017 to March 2021. Zomato has indicated its intention to challenge this ruling as well. The tax was calculated based on the export services provided to its subsidiaries outside of India.

Additionally, in April this year, the Karnataka commercial tax authority issued another tax demand of Rs 23 crore to Zomato, citing excess input tax credit under the Goods and Services Tax Regulation.

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