Zomato, a major player in the foodtech industry, has received a penalty notice for goods and services tax (GST) from Gujarat’s Deputy Commissioner of State Tax, pertaining to fiscal 2018-19.
According to Zomato’s filing, the company has been instructed to pay INR 4,11,68,604 for GST, along with additional interest and penalty charges totaling INR 8,57,77,696.
This order was issued subsequent to an audit of Zomato’s GST returns and accounts.
“This is to inform that the company has received an order for FY 2018-19 pursuant to the audit of GST returns and accounts by the Deputy Commissioner of State Tax, Gujarat raising demand of GST of INR 4,11,68,604, along with applicable interest and penalty totalling to INR 8,57,77,696. We believe that we have a strong case on merit and the company will be filing an appeal against the order before the appropriate authority,” the filing said.
It further added that the demand order has been received in respect of excess availment of input tax credit and short payment of GST on account of audit observations and interest, penalty thereon.
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“The company in its response to the show cause notice had clarified on all the issues along with relevant documents, circulars etc. which appears to not have been fully considered by the authorities while passing the order,” the filing said.
The company believes it has a strong case to defend before the appellate authorities and anticipates no financial impact from the matter.
This comes at a time when Zomato is already confronting tax-related challenges. In January, tax authorities issued a notice of INR 4.2 Cr for alleged GST underpayment. Concurrently, the company faced another setback with a show cause notice of INR 401.7 Cr from the Directorate General of GST Intelligence, Pune Zonal Unit, regarding unpaid tax on delivery charges. Zomato disclosed receiving three orders from tax officials in Delhi and Bengaluru, citing GST underpayment along with interest and penalties under various tax acts, totaling INR 4.24 Cr, as detailed in an exchange filing.
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Zomato announced its second consecutive profitable quarter, with a notable surge in profit after tax to INR 36 Cr during the September quarter of the financial year 2023-24 (FY24). This marked an impressive 18-fold increase from the PAT of INR 2 Cr in the previous quarter.
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