Zomato receives Rs 803 crore GST tax demand notice

MUMBAI Mumbai: Food delivery and instant commerce service provider Zomato has received a tax demand notice of Rs 803 crore from the Goods and Services Tax (GST) department. In a stock exchange filing, the company said that the notice has been served by the Joint Commissioner of CGST and Central Excise in Thane. This tax notice includes GST demand and interest and penalty. According to the exchange filing, “This tax demand notice is for non-payment of GST on delivery charges. The total amount of Rs 803 crore includes GST demand of Rs 401.7 crore and interest/penalty of the same amount.” The company further said, “We believe we have a strong case on the merits supported by the opinion of our external legal and tax advisors. The company will file an appeal against the order before the appropriate authority.” Earlier, in January and June this year, Zomato had received GST demand notices of Rs 4.2 crore and Rs 9.45 crore respectively.Zomato receives Rs 400 crore GST demand notice on delivery charges in 2023.Delivery charges are levied by Zomato, Swiggy and other food and instant commerce companies on their services.According to the report, “These companies claim that gig workers work as delivery partners. They are paid on the basis of orders. This delivery charge collected from the users is given directly to the gig worker.”

Delivery charges have been considered a service in GST laws, as the platforms are collecting it. Due to this, 18 percent GST can be levied on delivery.Zomato has recently raised more than $1 billion through qualified institutions placement (QIP) of equity shares.On Friday, the company’s stock was trading steady at Rs 285 per share.In the second quarter of FY25, Zomato’s total income grew 68.5 percent year-on-year to Rs 4,799 crore from Rs 2,848 crore in the same period of the previous fiscal. The company’s net profit grew 4.8 times to Rs 176 crore in the September quarter.