Zomato, one of India’s leading food delivery platforms, has found itself in hot water after receiving a hefty ₹17.7 crore GST demand. This notice, issued by the Assistant Commissioner of Revenue in West Bengal, is related to the non-payment of GST on delivery charges. Along with the tax amount, Zomato has also been asked to pay interest and penalties.
Breakdown of the ₹17.7 Crore Demand
The GST demand is for the period from April 2021 to March 2022. According to the details shared by the company, the total amount consists of:
- ₹11.12 crore in unpaid GST
- ₹5.46 crore in interest
- ₹1.11 crore as a penalty
Despite the hefty demand, Zomato is confident in its position. The company has clarified that it provided all the necessary documents and legal precedents to the authorities, but these were not taken into account when the order was passed.
Zomato’s Response and Plans for Appeal
Zomato has made it clear that it believes it has a strong case. The company plans to file an appeal against the GST demand before the appropriate authority. In a statement, Zomato said it does not expect this case to have any major financial impact on the business. The company remains confident that the demand will be overturned.
Past GST Issues for Zomato
This isn’t the first time Zomato has faced GST-related challenges. Just recently, the company was hit with a similar demand by the Tamil Nadu GST authority. In this case, Zomato was asked to pay ₹81 lakh in taxes, along with penalties and interest. The Tamil Nadu order was passed under section 73 of the Central Goods and Services Tax Act, 2017.
In response to these issues, Zomato plans to appeal against all the orders it has received, signaling that it will continue to fight these demands in court.
Other Challenges: Zomato Shuts Down ‘Legends’ Service
In addition to its tax woes, Zomato also recently discontinued its inter-city service ‘Legends’. This service was designed to allow customers to order iconic products from different cities, but Zomato decided to shut it down due to operational challenges.
Though Zomato has faced some setbacks recently, including this new tax demand, the company remains determined to address these issues through legal channels.
