Zomato continues to face mounting challenges, as the foodtech company has been ordered to pay a service tax of INR 92 Cr. This comes just a day after receiving a GST notice of INR 23.26 Cr for FY19 from tax authorities in Karnataka.
Zomato has been instructed to pay a service tax amounting to INR 92,09,90,306, along with applicable interest and a penalty of the same amount, as stated in the company’s regulatory filings.
Continue Exploring: Zomato’s GST saga continues: Karnataka tax authority slaps INR 23 Crore demand
The directive has been issued in accordance with Regulation 30 of the Listing Regulations by the Commissioner, Adjudication, Central Tax, Delhi, covering the period from October 2014 to June 2017.
The sum has been calculated based on sales conducted by the company’s foreign subsidiaries and branches to customers located outside of India.
The notification stated, “Company (Zomato) had clarified the allegations along with supporting documents and judicial precedents in its response to the show cause notice, which seems to not have been appreciated by the authorities while passing the order.”
Continue Exploring: Fresh trouble for Zomato as tax authorities seek INR 4.2 Crore in unpaid GST
As mentioned, Zomato is confident in its ability to present a compelling case to the appropriate appellate authority and foresees no financial repercussions for the company.
Zomato has been consistently receiving tax-related notices from the government in recent months, including a GST penalty notice of INR 8,57,77,696 from Gujarat’s Deputy Commissioner of State Tax in March 2024, and a show cause notice of INR 401.7 Cr from the Directorate General of GST Intelligence, Pune Zonal Unit, concerning unpaid tax on delivery charges collected from customers between October 29, 2019, and March 31, 2022, issued in December 2023.
Continue Exploring: Zomato faces INR 8.6 Cr GST penalty notice from Gujarat State Tax Authority
Despite the ongoing tax concerns, Zomato issued a total of 15,16,229 stock options to eligible workers through the Foodie Bay Employee Stock Option Plan 2014 (“ESOP 2014”) and the Zomato Employee Stock Option Plan 2021 (“ESOP 2021”).
The granted stock options cover 30,30,203 equity shares having a face value of INR 1 apiece, as per the regulatory filing. This includes any necessary changes resulting from company actions as specified in the ESOP programmes.
In the September quarter of the fiscal year 2023–24 (FY24), Zomato reported its second consecutive profitable quarter, with a profit after tax (PAT) of INR 36 Cr. Compared to the prior quarter’s PAT of INR 2 Cr, this represented an 18-fold rise.
Continue Exploring: Zomato reports remarkable surge in profit, achieving second consecutive profitable quarter in FY24