Zomato, the online food delivery platform, has been issued a show cause notice by the Goods and Services Tax (GST) office, totaling INR 401.7 crore. The notice is in relation to the alleged failure to remit taxes on delivery fee collections from customers between October 29, 2019, and March 31, 2022.
Continue Exploring: Zomato receives INR 401.7 Crore show cause notice from GST authority over unpaid taxes
This resulted in a decline in Zomato’s shares, with an initial decrease of 1.69 per cent on BSE, opening at INR 124.90, and a 1.77 per cent decrease on NSE, opening at INR 124.80.
Zomato, in a recent regulatory filing, clarified that the sum in question is derived from delivery charges collected from customers on behalf of delivery partners during the specified period.
The development adds to the challenges faced by Zomato, as it grapples with regulatory scrutiny and financial obligations. This show cause notice comes at a time when Zomato’s share prices are showing signs of recovery after a period of volatility.
Simultaneously, Zomato’s Live Entertainment division is poised to broaden its footprint by venturing into new cities and establishing new intellectual properties (IPs). This strategic move is in harmony with Zomato’s recent addition of a specialized tab on its app, aiding users in exploring and participating in anticipated events across various cities.
Continue Exploring: Zomato Live sets sights on new cities and intellectual properties for growth
Launched in 2018, Zomato Live Entertainment kicked off with the Zomaland IP, a vibrant amalgamation of a food carnival and music festival spanning eight cities. It drew in approximately 200,000 customers, offering an immersive experience with its blend of culinary delights, entertainment, and music.
Zeenah Vilcassim, the CEO of Zomato Live, expressed the company’s goal of achieving a significant double-digit contribution to Zomato’s top line within the next three years.
She stated that even though Zomato Live currently contributes a single-digit percentage to Zomato’s overall revenue, attaining a low double-digit contribution would be substantial, considering the scale and size of the business in online ordering.
