Food delivery platform Zomato revealed on Sunday that it has been served with notices from tax authorities in Delhi and Karnataka regarding purportedly insufficient payment of goods and services tax in 2018, amounting to Rs 4.2 crore.
Zomato, in a filing with stock exchanges, stated its intention to contest the tax demand notices and emphasised that it had already responded to earlier show-cause notices.
The company expressed concern that the recent orders from authorities in Delhi and Karnataka were issued without considering its earlier submissions.
Three orders have been issued in this regard. The first, issued by the Delhi sales tax office, relates to an alleged shortfall in GST payments in annual returns and non-reversal of input tax credit for exempted supplies, leading to a demand of Rs 2.3 crore, including penalties. Zomato clarified that it has made payments and provided supporting documents in its response, asserting confidence in its ability to defend the matter before appellate authorities without financial impact.
In the second case, Zomato acknowledged an additional interest payment of Rs 40,611, acknowledging an error in calculating the interest amount related to excess input tax credit.
The third tax demand, akin to a previous Rs 402 crore show-cause notice from GST authorities, involves the Karnataka GST department seeking Rs 1.9 crore, inclusive of penalties and interest.
In a related development reported on 28 December Zomato received a notice over alleged unpaid GST of Rs 402 crore on customer delivery fees. The company contended that it is not liable for these taxes, as it merely collects fees on behalf of its delivery partners, and plans to challenge this notice as well.
