Online food delivery platform Zomato has disclosed that it is facing a service tax demand and penalty order totaling over Rs 184 crore.
In response, the company intends to file an appeal against the order before the appropriate authority.
The demand pertains to non-payment of service tax covering the period from October 2014 to June 2017. This demand is based on sales conducted by the company’s foreign subsidiaries and branches to customers located outside India, as stated in a regulatory filing made by Zomato.
Zomato clarified that it had responded to the show cause notice with explanations supported by documents and legal precedents. However, it appears that the authorities did not fully appreciate the provided clarifications and precedents when issuing the order.
The order, issued by the Delhi Central Tax Commissioner (Adjudication) on April 1, imposes a service tax demand of Rs 92,09,90,306, along with unspecified interest and an equal amount in penalties.
Zomato has expressed its intention to challenge the order, believing it has a strong case on merits. The company plans to file an appeal before the appropriate authority to contest the demand and penalties imposed by the order.
