Food delivery company Zomato said it has received a tax demand, along with interest and penalty, aggregating to Rs 23 crore from the Karnataka commercial taxes authority. The tax notice has been issued for availing excess input tax credit under the goods and services tax (GST) rules, the Gurgaon-based company said in a stock exchange filing on Sunday.
“The company in its response to the show cause notice had clarified on the issue along with relevant documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order,” Zomato said in the filing. “The company believes that it has a strong case to defend the matter before the appellate authority and does not expect any financial impact on the company.”
The Rs 23-crore tax demand has come close on the heels of a similar notice for Rs 8.6 crore, which was raised with Zomato by the deputy commissioner of state tax, Gujarat, on March 15.
These followed a slew of notices served to Zomato by various tax authorities across the country.
On December 30 and 31, 2023, the company received three demand orders from the authorities in Delhi and Karnataka over alleged short payment of GST in 2018 amounting to Rs 4.2 crore. The first one, issued by the Delhi sales tax office, pertained to alleged short payment of GST in annual returns and non-reversal of input tax credit in case of exempted supplies, the company said. The order raised a demand of Rs 2.3 crore, including penalty.
In the second case, Zomato had said it would pay Rs 40,611 as additional interest on the claim that it incorrectly calculated the interest amount to be paid to the government on excess input tax credit reversed by the company. In the third tax demand, which was similar to the Rs 402 crore show-cause notice issued to it by the GST authorities, the Karnataka GST department sought Rs 1.9 crore, including penalties and interest.
On December 28 last year, ET reported that Zomato was served a notice over Rs 402 croreof allegedly unpaid GST on delivery fees collected from customers. The company has argued that it is not liable to pay these taxes as it only collects fees on behalf of its delivery partners.