Zomato faces ₹11.82 crore GST demand notice: Here's why
What's the story
Zomato has been issued a tax demand and penalty order totaling ₹11.82 crore, by the Additional Commissioner, Central Goods and Services Tax, Gurugram.
The order pertains to the Goods and Services Tax (GST) on services exported by Zomato, to its foreign subsidiaries between July 2017 and March 2021.
Late on Friday evening, Zomato announced its intention to contest this order in a regulatory filing, stating, "We believe that we have a strong case on merits."
Legal action
Appeal against the order
The order issued against Zomato includes a GST demand of ₹5.90 crore and an equal amount as a penalty.
The online food delivery service has expressed its intent to challenge the order stating, "the company will be filing an appeal against the order before the appropriate authority."
The tax authorities argue that services exported by Zomato to its foreign subsidiaries, do not meet the criteria for being classified as export of service under GST.
Claim
Authorities overlooked supporting documents
In response to the GST demand notice, Zomato defended its position with corroborative documents and legal precedents.
However, it claims these were not considered by the authorities while issuing the order.
"The company, in its response to the show cause notice, had clarified on the allegations, along with supporting documents and judicial precedents," stated Zomato.
These appear "not to have been appreciated by the authorities while passing the order," the firm further added.