Zomato Gets Rs 9.45 Crore GST Notice In Karnataka, Company Plans To Appeal

Renowned food delivery company Zomato Limited has seemingly run into trouble with the tax authorities and recently disclosed receiving a Goods and Services Tax (GST) demand notice amounting to Rs 9.45 crore from the Assistant Commissioner of Commercial Tax (Audit) of Karnataka. According to the notification submitted to BSE, Karnataka’s tax regulator has specified a GST liability of Rs 5.01 crore, along with interest totalling Rs 3.93 crore and a penalty of Rs 50.19 lakh. This aggregate amount of Rs 9.45 crore relates to an audit of Zomato’s GST returns and accounts for the fiscal year 2019-20. In response to the tax notice, the company said, “We believe we have a strong case on the merits and the company will file an appeal against the order before the appropriate authority.”

In response to the show cause notice issued to Zomato, the company “clarified the issue along with relevant documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order.”

Zomato has issued a statement indicating that it anticipates no financial impact from the recent GST demand notice of Rs 9.45 crore. This follows earlier tax notices, including one on April 20 this year for Rs 11.82 crore. The demand pertains to GST on export services provided from July 2017 to March 2021, involving services offered to its subsidiaries outside India. Zomato has clarified its intention to contest the ruling.

This is not the first time the food delivery company has received a tax notice. Zomato received a tax notice from the Additional Commissioner, (Central GST) Gurugram in 2021. According to media reports at the time, the notice demanded the company to pay Rs 11.82 crore including interest and penalty charges. The company’s response was the same to appeal against the tax order.