The order requires a GST payment of INR 11.27 crore, along with additional interest and penalty penalties totaling INR 23.26 crore. The Deepinder-Goyal-led company further claimed that it received the decision from the authority on March 30 relating to the overutilization of input tax credit and interest. Zomato plans to contest the injunction before the appropriate authorities.

Zomato Receives Tax Notice

Zomato, a large foodtech business, has received a goods and services tax (GST) notice of INR 23.26 crore from Karnataka tax authorities for fiscal year 2018-19 (FY19), according to a regulatory filing.

The order requires an INR 11.27 Cr GST payment, as well as an extra INR 23.26 Cr in interest and penalty penalties.

The company stated that it has received an order for FY 2018–19 in accordance with the Assistant Commissioner of Commercial Taxes (Audit), Karnataka, following the audit of GST returns and accounts. The order raises a demand for INR 11,27,23,564 in GST, along with applicable interest and penalty totaling INR 23,26,64,271, according to Regulation 30 of the Listing Regulations.

The business run by Deepinder Goyal further stated that it got the authority’s order on March 30 regarding the excessive use of input tax credit and the resulting interest and penalty.

Zomato stated that, although replying to the show cause notice with clarifications supported by relevant documents and legal precedents, the authorities did not fully evaluate this information when issuing the order.

Zomato therefore intends to contest the order in front of the relevant authorities. “The company does not anticipate any financial impact on the company and believes that it has a strong case to defend the matter before the appellate authority,” the statement continued.

This occurs at a time when Zomato is already dealing with tax concerns. Last month, the foodtech company received a GST penalty letter from Gujarat’s Deputy Commissioner of State Tax for fiscal year 2018-19. The corporation was requested to pay INR 4,11,68,604 in GST, with additional interest and penalty charges totaling INR 8,57,77,696.

In December, Zomato received an INR 401.7 crore show cause notice from the Directorate General of GST Intelligence, Pune Zonal Unit, for unpaid tax on delivery charges collected from clients between October 29, 2019 and March 31, 2022.

Previously, the company stated that it “strongly believes that it is not liable to pay any tax because the delivery charge is collected by the company on behalf of the delivery partners.”

Zomato declared its second consecutive profitable quarter, with earnings after tax rising to INR 36 crore in the September quarter of fiscal year 2023-24. This was an 18X increase from PAT of INR 2 Cr in the previous quarter.

Zomato shares began trading at INR 182.35 on Monday (April 1).