Foodtech giant Zomato has received a tax demand, along with interest and penalty, totaling INR 23 crore from the Karnataka commercial taxes authority. The Gurgaon-based company disclosed this in a stock exchange filing on Sunday, stating that the tax notice has been issued for availing excess input tax credit under the Goods and Services Tax (GST) rules.
“In its response to the show cause notice, the company provided clarification on the issue supported by pertinent documents and legal precedents. However, it seems that the authorities did not acknowledge this information when issuing the order,” stated Zomato in the filing. “The company is confident in its strong defence and expects no financial consequences from this matter before the appellate authority.”
The INR 23 crore tax demand closely follows a similar notice for INR 8.6 crore, issued to Zomato by the deputy commissioner of state tax, Gujarat, on March 15.
Continue Exploring: Zomato faces INR 8.6 Cr GST penalty notice from Gujarat State Tax Authority
These came after a series of notices issued to Zomato by tax authorities throughout the country.
On December 30 and 31, 2023, the company was issued three demand orders by authorities in Delhi and Karnataka for an alleged short payment of GST in 2018 totaling INR 4.2 crore. According to the company, the first order from the Delhi sales tax office related to an alleged shortfall in GST in annual returns and failure to reverse input tax credit for exempted supplies. This order imposed a demand of INR 2.3 crore, inclusive of penalties.
Continue Exploring: Fresh trouble for Zomato as tax authorities seek INR 4.2 Crore in unpaid GST
In the subsequent instance, Zomato had stated its intention to remit INR 40,611 as extra interest, acknowledging an error in calculating the interest due to the government on the surplus input tax credit reversed by the company. In the third tax demand, mirroring the INR 402 crore show-cause notice from the GST authorities, the Karnataka GST department sought INR 1.9 crore, incorporating penalties and interest.
On December 28 last year, it was reported that Zomato received a notice regarding INR 402 crore of unpaid GST on delivery fees collected from customers. The company contends that it isn’t responsible for paying these taxes as it merely collects fees on behalf of its delivery partners.
Read Other Articles: Zomato receives INR 401.7 Crore show cause notice from GST authority over unpaid taxes
