Zomato, a foodtech giant, has received a fresh Goods and Services Tax (GST) notice amounting to INR 11.8 crore from the Gurugram GST authority.
The order includes a GST demand of INR 5.9 Cr and an accompanying penalty of INR 5.9 Cr.
As per the exchange filing on Friday (April 19), the company stated that it had received a tax order from the additional commissioner of central goods and services tax, Gurugram, for the period spanning July 2017 to March 2021. The order entails a GST demand of INR 5,90,94,889, along with corresponding interest and penalty charges of the same amount.
This comes weeks after Zomato received two consecutive tax notices of INR 23 Cr and INR 92 Cr from the Karnataka tax authority earlier this month.
Continue Exploring: Zomato’s GST saga continues: Karnataka tax authority slaps INR 23 Crore demand
In the filing, Zomato stated that the latest demand order pertained to the GST on export services provided by the company to its subsidiaries located outside India between July 2017 and March 2021.
Zomato stated that it received the demand order, asserting that the services provided didn’t meet the criteria for classification as export of service under GST.
According to the exchange filing, the company responded to the show cause notice by providing clarification on the allegations, supported by documents and legal precedents. However, it seems that the authorities did not fully appreciate this when issuing the order.
Zomato anticipates no financial repercussions for the company as a result of the tax penalty.
It’s worth mentioning that Zomato is currently facing various tax-related challenges. In March, the leading foodtech company received a penalty notice from the Deputy Commissioner of State Tax in Gujarat for the fiscal year 2018-19.
Last December, Zomato was served with a show cause notice amounting to INR 401.7 crore from the Directorate General of GST Intelligence, Pune Zonal Unit. This notice pertained to unpaid taxes on delivery charges collected from customers spanning from October 29, 2019, to March 31, 2022.
Despite these tax notices, the company’s stock performance appears largely unaffected. Zomato shares have shown significant momentum in recent months, driven by robust financial results and optimistic forecasts from D-Street regarding Blinkit’s growth prospects in the mid to long term.
Continue Exploring: Zomato’s shares surge to record high, nearing INR 200 mark as Kotak raises price target to INR 210
Zomato’s shares have surged nearly 53% year-to-date and are presently trading at INR 189.2 on the Bombay Stock Exchange (BSE).