Zomato to Challenge Rs 4.2 Cr GST Notices Through Appeals

Zomato, a food-delivery platform, disclosed on Sunday that it has been issued notices by tax authorities in Delhi and Karnataka for purportedly underpaying goods and services tax in 2018, totaling Rs 4.2 crore.

The company stated in a filing to stock exchanges that it intends to appeal the tax demand notices.

‘Zomato said it was issued show-cause notices earlier over these demands and that it had submitted its response. But “authorities in Delhi and Karnataka seem to have issued the above orders dated December 30 and 31, 2023 without giving due consideration to our response submitted earlier”, it said.

Three orders have been issued, with the initial one coming from the Delhi sales tax office. It relates to the purported underpayment of GST in annual returns and the failure to reverse input tax credit for exempted supplies, resulting in a demand of Rs 2.3 crore, inclusive of penalties

Zomato said it has made the payments and submitted the documents supporting its case in its response. It added that it has “a good case to defend the matter before the appellate authorities without any financial impact”.

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In the second instance, Zomato acknowledged its commitment to pay an additional interest amount of Rs 40,611. This pertains to the claim that the company inaccurately calculated the interest to be remitted to the government on the excess input tax credit reversed by the company.

In the third tax demand, mirroring a Rs 402 crore show-cause notice from the GST authorities. The Karnataka GST department has requested Rs 1.9 crore, encompassing penalties and interest.

ET, alleged unpaid GST amounting to Rs 402 crore on delivery fees collected from customers. The Gurgaon-based company asserted its non-liability for these taxes. Contending that it merely collects fees on behalf of its delivery partners. Zomato intends to contest this matter.