GST Authorities Slap Rs 402 Crore Show-Cause Notice to Zomato

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by Sandip Das on 28 December 2023,  3 min read

GST Authorities Slap Rs 402 Crore Show-Cause Notice to Zomato - MyDhanush Blogs by Ashika
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Share price of Zomato declined over 3 percent intraday on December 28 on show-cause notice (SCN) for GST dues.

The food delivery aggregator received a Rs 402-crore show-cause notice from the goods and services tax (GST) authorities over unpaid dues. 

The tax amount alleged in the notice is based on the sum collected by the company as delivery charges from customers on behalf of the delivery partners.

“Zomato Limited has received a show cause notice on December 26, 2023 under Section 74(1) of the Central Goods and Services Tax Act, 2017 from the Directorate General of GST Intelligence, Pune Zonal Unit,” the company said in an exchange filing.

“The SCN requires the Company to show cause as to why an alleged tax liability of Rs 401.70 crore along with interest and penalty for the period from 29 October 2019 to 31 March 2022 should not be demanded from the Company. The amount alleged in the SCN is based on the amounts collected by the Company as delivery charges from the customers on behalf of the delivery partners during the referred period,” the report said.

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Zomato further emphasized its strong belief that it isn’t obliged to pay any tax because of its role in collecting the delivery charge on behalf of the delivery partners.

Further, in view of the contractual terms and conditions mutually agreed upon, the delivery partners have provided the delivery services to the customers and not the Company. Our external legal and tax advisors also support this. Zomato will be filing an appropriate response to the SCN, the company added.

At 11:25 AM, the stock was trading at Rs 124.05 per share on NSE, down Rs 3 or 2.36 percent. 

Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment decisions.

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