The GST authorities have slapped a ₹803.4-crore tax demand on food delivery aggregator Zomato.
Zomato said in a regulatory filing on Thursday it received the demand order for the non-payment of GST on delivery charges along with interest and penalty.
Shares of the firm slipped on the news but recovered subsequently and closed in the positive territory on Friday.
On the BSE, the Zomato scrip opened lower at ₹279.80 and declined further to ₹277.90. Strong buying at these levels saw the counter ending at ₹288.40, marking a rise of 1.23 per cent, or ₹3.50, over the last close. Zomato currently has a market cap of ₹2.78 lakh crore on the BSE.
Zomato added in its filing that it will file an appeal before the appropriate authority. The company believes it has a strong case
“The company has received an order on December 12, 2024 for the period October 29, 2019 to March 31, 2022 passed by Joint Commissioner of CGST & Central Excise, Thane Commissionerate, Maharashtra, confirming a demand of GST of ₹401,70,14,706 with interest as applicable and penalty of ₹401,70,14,706,” the communication to the exchanges said.
“We believe that we have a strong case on merits, which is backed by opinions from our external legal and tax advisers. The company will be filing an appeal against the order before the appropriate authority,” it added.
In December last year, Zomato had received a GST notice of ₹401.7 crore, while rival Swiggy got a similar demand of over ₹326 crore.
The authorities want to tax delivery fees under the GST rules since they maintain the delivery of food falls under the service category, which is liable to be taxed at 18 per cent.
The aggregators have said they are not liable to pay any taxes.
“The company strongly believes that it is not liable to pay any tax since the delivery charge is collected by the company on behalf of the delivery partners.
“Further, in view of the contractual terms and conditions mutually agreed upon, the delivery partners have provided the delivery services to the customers and not the company,’’ Zomato had said in December last year.
