ZomatoFaces₹2.22 Crore GST Demand and Penalty Order

Zomato receives a fresh GST demand and penalty order of ₹2.22 crore from Delhi's sales tax officer, covering the period from April 2018 to March 2019. The company plans to file an appeal against the order, citing a strong case on merits.

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Dil Bar Irshad
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ZomatoFaces₹2.22 Crore GST Demand and Penalty Order

ZomatoFaces₹2.22 Crore GST Demand and Penalty Order

Online food delivery platform Zomato has been hit with a fresh Goods and Services Tax (GST) demand and penalty order amounting to ₹2.22 crore by Delhi's sales tax officer. The order, which covers the period from April 2018 to March 2019, consists of a GST demand of ₹2,22,91,376, along with interest of ₹2,08,98,164 and a penalty of ₹22,29,136.

Why this matters: The case highlights the ongoing challenges faced by e-commerce and food delivery companies in complying with India's GST regime, which has significant implications for the country's tax revenue and the growth of the digital economy. The case highlights the ongoing challenges faced by e-commerce and food delivery companies in complying with India's GST regime, which has significant implications for the country's tax revenue and the growth of the digital economy. The outcome of Zomato's appeal will set a precedent for other companies facing similar issues, influencing the regulatory environment for the industry as a whole.

In response to the order, Zomato has announced its intention to file an appeal before the appropriate authority. The company stated in a regulatory filing, "We believe that we have a strong case on merits and the company will be filing an appeal against the order before the appropriate authority."

This is not the first time Zomato has faced GST-related issues. Last month, the company received a GST demand and penalty order worth ₹11.81 crore, consisting of ₹5.9 crore in GST demand and a penalty of ₹5.9 crore for the period from July 2017 to March 2021. Additionally, earlier this month, Zomato received notices from tax authorities in Delhi and Karnataka over alleged short payment of GST in 2018, amounting to ₹4.2 crore.

The GST, which was introduced in India in July 2017, has posed challenges for many businesses, including those in the e-commerce and food delivery sectors. Companies have had to adapt their systems and processes to comply with the new tax regime, which has led to instances of alleged non-compliance and disputes with tax authorities.

The outcome of Zomato's appeal against the latest GST demand and penalty order will be closely watched by industry observers and other e-commerce companies facing similar issues. The case highlights the need for businesses to maintain robust tax compliance systems and regularly review their practices to avoid potential disputes with tax authorities.

The online food delivery market's continued growth and evolution will require Zomato and other companies in the sector to thread a complex regulatory path while focusing on innovation and customer satisfaction. The ability to adapt to changing tax regulations and maintain compliance will be essential for the long-term success and sustainability of the industry.

Key Takeaways

  • Zomato receives ₹2.22 crore GST demand and penalty order from Delhi's sales tax officer.
  • The order covers the period from April 2018 to March 2019 and includes interest and penalty.
  • Zomato to file an appeal against the order, citing a strong case on merits.
  • This is not Zomato's first GST-related issue, with previous demands and penalties totaling ₹16.03 crore.
  • The outcome of the appeal will set a precedent for other e-commerce and food delivery companies facing similar issues.