In a recent development, online food delivery giant Zomato received a Goods and Service Tax (GST) notice of ₹9.45 crore from the tax authorities in Karnataka. This notice pertains to the financial year 2019-20 and follows an audit of Zomato’s GST returns and accounts by the Assistant Commissioner of Commercial Taxes (Audit).
The breakdown of the ₹9.45 crore demand is as follows:
- ₹5.02 crore – Claimed GST amount
- ₹3.93 crore – Interest on the claimed GST
- ₹50.19 lakh – Penalty
Zomato has expressed its intent to appeal the tax order. The company has informed the stock exchange through a filing that they are confident in their position and will be contesting the notice.
Zomato now has the opportunity to appeal the GST demand notice. The company can approach the appellate authority within the tax department. If the dispute is not resolved at this stage, Zomato can further escalate the matter to tribunals or even courts.
The ₹9.45 crore GST demand notice is unlikely to have a significant financial impact on Zomato, considering the company’s overall size. However, it does add an element of uncertainty and could potentially lead to legal expenses.
It’s important to note that Zomato has expressed confidence in its position and plans to contest the notice. The final outcome of the case will depend on the specific details and arguments presented by both sides during the appeal process.
The GST demand notice on Zomato is unlikely to have any immediate impact on consumers. Food prices on the platform are determined by various factors, including restaurant pricing, delivery charges, and promotional offers. A GST-related dispute between Zomato and the tax department is not expected to directly affect these aspects.
Looking Ahead
The development highlights the importance of proper GST compliance for businesses operating in India. Companies need to ensure accurate calculation, classification, and filing of GST to avoid such situations. The final outcome of Zomato’s appeal will be watched with interest, as it could set a precedent for similar cases in the future.
