Zomato gets GST demand order of ₹23.26 crore for FY 2018-19

Online food delivery platform Zomato said, on March 31, that the company has received a GST demand order worth ₹23.26 crore for FY 2018-19 from Karnataka tax authorities, on March 30. The demand order has been received in respect of excess availment of input tax credit and interest, penalty thereon, the company said in an exchange filing.

“Pursuant to Regulation 30 of the Listing Regulations, this is to inform that the Company has received an order for FY 2018-19 pursuant to the audit of GST returns and accounts by the Assistant Commissioner of Commercial Taxes (Audit), Karnataka raising demand of GST of INR 11,27,23,564/, along with applicable interest and penalty totaling to INR 23,26,64,271/-,” it said.

Also read: Infosys to receive windfall tax refund of ₹6,329 crore from income tax department

The company further said that it has a strong case on merits and it will be filing an appeal against the order before the appropriate authority.

“The Company believes that it has a strong case to defend the matter before the appellate authority and does not expect any financial impact on the Company,” the company added.

The company in its response to the show cause notice had clarified on the issue along with relevant documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order.

Earlier this month, Zomato was served with a tax notice by the Deputy Commissioner of State Tax of Gujarat regarding an audit of the company’s GST returns and accounts for the financial year 2018-19. The notice highlighted penalties related to excessive input tax credit claims and underpayment of GST.

Zomato revealed that it received an order requiring payment of ₹4,11,68,604 in GST, along with additional interest and penalties totaling ₹8,57,77,696 for the financial year 2018-19.

Also read: Fired US employees accuse TCS of giving their jobs to Indian H-1B visa workers; Tata Group's company responds

‘’The company has received an order for FY 2018-19 pursuant to the audit of GST returns and accounts by the Deputy Commissioner of State Tax, Gujarat raising demand of GST of ₹4,11,68,604/-, along with applicable interest and penalty totaling to ₹8,57,77,696," the company said.

Zomato has noted that these aspects don't seem to have been fully considered by the authorities when issuing the order.