Zomato Faces Rs 23.26 Crore GST Demand for FY 2018-19

Zomato, the renowned food delivery and restaurant discovery platform, disclosed on Sunday that it has received an order for the fiscal year 2018-19 following an audit of Goods and Services Tax (GST) returns and accounts conducted by the Assistant Commissioner of Commercial Taxes (Audit) in Karnataka. The order entails a GST demand of Rs 23.26 crore for the aforementioned fiscal year.

In a regulatory filing, Zomato stated, "This is to inform that the company has received an order for FY 2018-19 pursuant to the audit of GST returns and accounts by the Assistant Commissioner of Commercial Taxes (Audit), Karnataka raising demand of GST of Rs 11,27,23,564, along with applicable interest and penalty totaling to Rs 23,26,64,271."

The demand order primarily pertains to the alleged excess availment of input tax credit and the subsequent imposition of interest and penalty. Zomato responded to the notice by providing clarifications on the issue, accompanied by relevant documents and judicial precedents. However, the company expressed dissatisfaction, stating that its submissions "appear to not have been appreciated by the authorities while passing the order."

"We believe that we have a strong case on merits and the company will be filing an appeal against the order before the appropriate authority," Zomato asserted in the exchange filing. Furthermore, the company emphasized that it does not anticipate any financial repercussions resulting from this issue.

Zomato's announcement comes amid an increasingly complex regulatory environment for tech companies operating in India. Despite the challenges posed by the GST demand, Zomato remains confident in its position and intends to pursue legal recourse to address the matter.

The development underscores the importance of compliance and regulatory scrutiny in the Indian business landscape, particularly within the burgeoning technology sector. Zomato's response to the demand order reflects its commitment to upholding legal standards while navigating regulatory challenges in its operational domain.