Zomato Gets GST Demand Notice of INR 803 Cr

Although Zomato was issued a GST notice of INR 401.70 Cr, it was also asked to pay a similar penalty.

Zomato said the Joint Commissioner of CGST and Central Excise Commissioner Thane has issued a notice for non-payment of GST on delivery charges.

The company said it will appeal the opinion to the competent authority, as it believes it has strong arguments on the merits.

Major in Food Technology Zomato received another GST demand notice, this time for INR 401.70 Cr. Besides the GST demand, the company has been asked to pay applicable interest on INR 401.70 Cr and pay an equal amount as penalty.

In an exchange filing, the company said the Joint Commissioner of CGST and Central Excise Commissioner Thane had issued a notice for non-payment of GST on delivery charges.

Zomato said it will appeal the notice to the competent authority as it believes it has strong arguments on the merits. “We believe we have a strong case on the merits, supported by the opinions of our external legal and tax advisors,” the company said.

The GST demand and penalty amounts to INR 803.4 Cr, excluding interest. This amount represents more than double that Net profit of INR 351 Cr Zomato reported in the financial year 2023-24 (FY24).

The foodtech major has published a net profit of INR 176 Cr during the September quarter of the current financial year.

It is pertinent to mention that Zomato received several GST demand notices from authorities in Karnataka, Haryana and Gujarat earlier this year.

He last received a GST application and penalty order of more than INR 17.70 Cr from the West Bengal GST authorities in September. Earlier in the month, she had received a GST notice of INR 9.85 Cr from the same authority in West Bengal.

Following receipt of each of these GST notices, Zomato said it believes it has a strong case and will appeal. However, there has been no further development on the matter.

Zomato’s rival Swiggy is also facing the same problem. As per its updated draft red herring prospectus, Swiggy faced a potential GST related debts to the tune of INR 326.7 Cr.

The Pune tax authorities had issued a notice to the company for allegedly not paying tax on delivery charges collected from customers between July 2020 and March 2022.

For Zomato, the latest development comes soon after raised 8,500 INR Cr (approximately $1 billion) thanks to its first qualified institutional placement (QIP) at the end of November.

Zomato shares ended Thursday’s trading session (December 12) down 2.36% from the previous close at INR 284.90.