Zomato faces Rs 11.82 crore tax demand on export services

Zomato: Online food delivery giant Zomato faces a tax hurdle after receiving a demand and penalty order worth Rs 11.82 crore from the Indian government. This order relates to Goods and Services Tax (GST) applied to export services provided by Zomato to its overseas subsidiaries between July 2017 and March 2021.

The order, issued by the Additional Commissioner, Central Goods and Services Tax, Gurugram, details a GST demand of Rs 5,90,94,889 along with unspecified interest and a matching penalty amount.

Zomato, in a regulatory filing made late on Friday, expressed disagreement with the order and its intention to appeal. "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," the filing stated.

The company clarified that the demand arose from the authorities' position that the export services rendered to their overseas subsidiaries during the period did not qualify as exempt "exports of service" under the GST framework. Zomato claims to have submitted a detailed response with supporting documents and legal precedents to counter this claim during the initial assessment process. However, their arguments appear to have been disregarded in the final order.

Zomato shares ended 1.78 per cent higher at Rs 188.50 apiece on the National Stock Exchange on Friday, April 19, 2024.

?