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    Zomato faces GST demand, penalty order worth over INR 2 crore

    What’s the news: Zomato received a Goods and Service Tax (GST) order confirming a demand of INR 2.22 crores with an interest of INR 2.08 crores and a penalty of INR 22.29 lakhs, as per a stock exchange filing by the company published on May 1, 2024.

    The company said that it received the order for the period April 2018 to March 2019, confirming demand of GST of over Rs. 2 crores (INR 2,22,91,376) with interest of over Rs. 2 crores (INR 2,08,98,164) and a penalty of over Rs. 22 lacs (INR 22,29,136). The order was passed under Section 73 of the Central Goods and Service Tax (CGST) Act, 2017, which looks at determining tax that has not been paid or has been short-paid by a taxpayer.

    As per the filings, the demand order “alleges excess availment of input tax credit” by Zomato for 2018-19 along with applicable interest and penalty. The company responded to the show cause notice by stating it had “clarified on all the issues along with appropriate facts and relevant documents which appears to not have been fully considered by the authorities while passing the order.” The filing stated that Zomato did not expect the order to impact the company financially. The company also said it would file an appeal against the order before the appropriate authority.

    Zomato received a hefty GST order in 2023: Back in November 2023, the Directorate General of GST Intelligence (DGGI) issued a demand notice to food delivery platforms Swiggy and Zomato for non-payment of GST on the delivery fee collected from consumers. Zomato allegedly failed to pay GST worth over ₹400 crore while Swiggy was accused of non-payment amounting to around ₹350 crore between July 2017 and March 2023.

    The government had argued that food delivery is a service and thus platforms providing these services must pay a GST at an 18 percent rate aside from the 5 percent GST paid on food orders (and not restaurants). However, the platforms had responded that they pass the collected fee on to gig workers. These workers too are exempt from GST since each worker is below the INR. 20 lakh threshold.

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    The post Zomato faces GST demand, penalty order worth over INR 2 crore appeared first on MediaNama.

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