Zomato, the prominent online food delivery platform, faces a significant challenge as it grapples with a goods and services tax (GST) demand and penalty order totaling Rs 11.81 crore. This order, issued for the period spanning July 2017 to March 2021, includes a GST demand of Rs 5.9 crore along with an equivalent penalty amount, highlighting the regulatory complexities faced by digital marketplace entities.
The company disclosed receiving this order in a regulatory filing, indicating its issuance by the Additional Commissioner of Central Goods and Services Tax in Gurugram. The notice underscores the tax authorities’ scrutiny of Zomato’s compliance and financial transactions during the specified period.
Prior to this development, Zomato had received notices from tax authorities in Delhi and Karnataka concerning alleged short payment of GST in 2018, amounting to Rs 4.2 crore. Despite the company’s stated intention to appeal against these notices, the cumulative impact of regulatory scrutiny raises concerns over its financial obligations and operational sustainability.
Despite these challenges, Zomato reported a profit of Rs 125 crore in the third quarter of the last financial year, marking a significant improvement compared to the corresponding period in the previous year. However, the looming GST demand and penalties pose additional hurdles for the company as it navigates the evolving regulatory landscape and strives to maintain profitability amidst intense competition in the food delivery industry.
