Zomato to Contest Rs 184 Crore Service Tax Demand and Penalty Order

• ByStartupStory     |    April 2, 2024

leading online food delivery platform Zomato finds itself embroiled in a service tax dispute, as it received a demand and penalty order amounting to over Rs 184 crore. The company has resolved to challenge this order and intends to file an appeal before the appropriate authority.

According to a regulatory filing made by Zomato, the demand order pertains to alleged non-payment of service tax for the duration spanning October 2014 to June 2017. This demand was calculated based on certain sales conducted by the company’s foreign subsidiaries and branches to customers situated outside India.

In a statement issued by Zomato, the company expressed its stance: “In response to the show cause notice, we had clarified on the allegations along with supporting documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order.”

The order, issued by the Delhi Central Tax Commissioner(Adjudication) on April 1, specifies the demand of service tax amounting to Rs 92,09,90,306 for the mentioned period, in addition to applicable interest (not quantified) and a penalty of the same amount.

Zomato remains resolute in its conviction, asserting that it possesses a “strong case on merits” and therefore plans to contest the order through the appellate process.

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