Karnataka tax authorities demand ₹9.45 crore GST from Zomato

Food delivery company Zomato has received a demand of over ₹9.45 crore, the company informed the exchanges. The order, issued by the Assistant Commissioner of Commercial Taxes (Audit) in Karnataka, pertains to the fiscal year 2019-20.

The demand includes ₹5,01,95,462 in GST, along with ₹3,93,58,743 in interest, and ₹50,19,546 in penalty, totaling ₹9,45,73,751.

"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," Zomato stated.

The demand order, given on June 29, cited “excess availment of input tax credit and interest, penalty thereon.”

Zomato has responded to the show cause notice with relevant documents and judicial precedents, which the authorities did not consider while passing the order.

“The company 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,” Zomato added.

Earlier, on April 20, the company received a GST demand of ₹11.82 crore for export services provided to its subsidiaries outside India. Previously, on April 11, Zomato had received a tax demand concerning the availing of excess input tax credit amounting to ₹23 crore.

At the end of the financial year 2023-24 (FY24), Zomato reported a consolidated net profit of ₹351 crore, compared to a net loss of ₹971 crore at the end of FY23.

On July 1, Zomato's shares traded at ₹203.60, up 1.65% on the Bombay Stock Exchange.