Zomato slapped with Rs 4.11 cr GST penalty by Gujarat Tax Authority

Online food delivery platform, Zomato, is facing a Goods and Services Tax (GST) penalty notice from the Deputy Commissioner of State Tax of Gujarat. The penalty is in relation to the audit of the company’s GST returns and accounts for the financial year 2018-19. The demand order Zomato has received is due to the excess availment of input tax credit and short payment of GST.

According to the regulatory filing to the stock exchanges, Zomato disclosed that it received an order demanding a GST of Rs 4,11,68,604 along with applicable interest and penalty totalling to Rs 8,57,77,696 for the financial year 2018-19.

‘’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 Rs 4,11,68,604/-, along with applicable interest and penalty totaling to Rs 8,57,77,696,'' Zomato said in its exchange filing.

In response to the notice, the company clarified all the issues and provided relevant documents, circulars etc. Zomato stated that these do not appear to have been fully accounted for by the authorities while passing the order.

"The company believes that it has a strong case to defend the matter before the appellate authorities without any financial impact," said Zomato in its statement.

In another development, Antfin Singapore Holding, an affiliate company of Ant Financial Group and part of Chinese e-commerce giant Alibaba, reduced its stake in Zomato by two per cent. The stake amounting to Rs 2,827 crore was sold through open market transactions on March 6.

Antfin Singapore Holding Pte sold more than 17,63,95,675 shares in two parts, marking a 2.02 per cent decrease in their stake in Zomato, as per the bulk deal data on the Bombay Stock Exchange (BSE).

Notably, Zomato was also served with a show cause notice in December 2023 worth Rs 402 crore, for unpaid GST on delivery charges, in addition to interest and penalty for the period of October 29, 2019 to March 31, 2022.