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Zomato has received multiple similar demands previously, the last being for Rs 11.82 crore on April 20, for export services provided by the company to its subsidiaries located outside India. Zomato has also received a tax demand with respect to the availing of excess input tax credit aggregating to Rs 23 crore from the Karnataka commercial taxes authority on April 1. It was hit with a similar demand worth Rs 8.6 crore raised by the deputy commissioner of state tax, Gujarat on March 15.
On December 30 and 31, 2023, the company received three demand orders from the authorities in Delhi and Karnataka over alleged short payment of GST in 2018 amounting to Rs 4.2 crore. While the first demand pertained to alleged short payment of GST in annual returns and non-reversal of input tax credit in case of exempted supplies, the second was for additional interest on the claim that Zomato had incorrectly calculated the interest amount to be paid to the government on excess input tax credit reversed by the company. In the third case, the Karnataka GST department had made a tax demand similar to an earlier, larger show cause notice.
On December 28, Zomato had said that it had received a Rs 402 crore show cause notice from GST authorities over unpaid tax on delivery charges collected from customers. At the time, the firm had said it is not liable to pay these taxes as it only collects fees on behalf of its delivery partners. The notice followed pre-demand notices to Zomato as well as its Bengaluru-based rival Swiggy, seeking GST of Rs 750 crore sent in November last year.
Besides this, Zomato has also received multiple tax demands on the basis of sales made by its international subsidiaries. The firm had received a service tax demand and penalty order aggregating more than Rs 184 crore related to the non-payment of service tax from October 2014 to June 2017, made on the basis of certain sales made by the company’s foreign subsidiaries and branches to its customers located outside India, ET had reported on April 2 this year.
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The firm has closed down almost all of its international subsidiaries, including those in Singapore, the UK, the US and South Africa. On January 5, ET reported that Zomato had initiated the liquidation process for its Vietnam business. Prior to this, it had commenced the liquidation process for its business in Poland, Gastronauci, on December 2 last year.
