Zomato Ltd Received Service Tax Notice

On April 01, 2024, the online food delivery service provider Zomato Ltd announced that it had received an order passed by the Commissioner, Adjudication, Central Tax, Delhi. The order includes the demand of service tax of ₹92,09,90,306, along with applicable interest (not quantified) and penalty of ₹92,09,90,306 for the period October 2014 to June 2017.

The demand order has been received, confirming the claim for non-payment of service tax for the months of October 2014 through June 2017. The demand was based on specific sales that the company’s foreign subsidiaries and branches made to clients who were outside India. The company clarified the claims in its answer to the show cause notice, providing supporting documentation and court precedents. However, it doesn’t seem that the authorities took this into consideration when approving the order.

Zomato believes that it has a strong case to defend the matter before the relevant appellate authority and does not expect any financial impact on the company.

In the month of March 2024, the company 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 for GST of ₹4,11,68,604, along with applicable interest and penalty totalling to ₹8,57,77,696 for the excess availment of input tax credit and short payment of GST on account of audit observations and interest, as well as penalty thereon.

Zomato Ltd clarified that all the issues, along with relevant documents, circulars, etc., appear not to have been fully considered by the authorities while passing the order.

About Zomato Ltd

Zomato Limited was incorporated in 2010. The company is one of the leading online Food Service platforms in terms of the value of food sold. Its offerings include food delivery, dining-out services, Loyalty programs, and others. The company operates brands such as Zomato, Hyperpure, blinkit, and Feeding India. During Q2FY24, quick commerce Blinkit’s contribution was positive throughout the quarter.

On April 01, 2024, the Zomato share price opened at ₹184.80 and touched the day low of ₹181.35 at 9:35 AM.

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