Zomato: Zomato gets fresh GST notices for Rs 4.2 crore; plans to appeal against demands

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Food-delivery platform Zomato said on Sunday that it received notices from the tax authorities in Delhi and Karnataka over alleged short payment of goods and services tax in 2018 amounting to Rs 4.2 crore.

The company will appeal against the tax demand notices, Zomato said in a filing with stock exchanges.

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Zomato said it was issued show-cause notices earlier over these demands and that it had submitted its response. But “authorities in Delhi and Karnataka seem to have issued the above orders dated December 30 and 31, 2023 without giving due consideration to our response submitted earlier”, it said.

Three orders have been issued. The first one, issued by the Delhi sales tax office, pertains to alleged short payment of GST in annual returns and non-reversal of input tax credit in case of exempted supplies, it said. This order raises a demand of Rs 2.3 crore, including penalty.

Also read | Zomato, Swiggy want to clarify stance to DGGI on tax notice

Zomato said it has made the payments and submitted the documents supporting its case in its response. It added that it has “a good case to defend the matter before the appellate authorities without any financial impact”.

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In the second case, Zomato said it will pay Rs 40,611 as additional interest on the claim that it incorrectly calculated the interest amount to be paid to the government on excess input tax credit reversed by the company.Also read | ETtech Explainer: The Rs 402 crore GST notice that sent Zomato’s shares tumbling

In the third tax demand, which is similar to a Rs 402 crore show-cause notice issued to it by the GST authorities, the Karnataka GST department has sought Rs 1.9 crore including penalties and interest.

On December 28, ET reported that Zomato received a notice over Rs 402 crore of alleged unpaid GST on delivery fees collected from customers. The Gurgaon-based company had said it was not liable to pay these taxes as it only collects fees on behalf of its delivery partners. Zomato plans to challenge this notice as well.

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