Zomato, the well-known food delivery giant led by Deepinder Goyal, has recently received GST tax demand notices amounting to over Rs 4.59 crore from tax authorities in Tamil Nadu and West Bengal. These demands also include applicable interest and penalties. In response, Zomato has announced plans to challenge these orders in the appropriate appellate forums.

Details of Zomato GST tax demand

The tax notices were issued by the Assistant Commissioner of GST and Central Excise in Tamil Nadu and the Assistant Commissioner of Revenue in West Bengal. The Tamil Nadu authority’s demand includes Rs 81,16,518 in GST along with a penalty of Rs 8,21,290. The interest amount for this demand has not yet been quantified.

The West Bengal authority’s demand is much higher, totaling Rs 1,92,43,792 in GST. Additionally, the interest charge amounts to Rs 1,58,12,070, and the penalty is Rs 19,24,379. These amounts contribute to the significant overall tax demand faced by Zomato.

Zomato Response to the Notices

In its response to the notices, Zomato provided the authorities with relevant documents and judicial precedents that they believe support their case. However, Zomato claims that this information was not fully considered by the authorities before issuing the final orders. Despite the large sums involved, Zomato is confident in its ability to defend against these tax demands and believes it has a strong case for appeal.

Legal Context of the Tax Demands

The tax demands were issued under Section 73 of the Central Goods and Services Tax Act, 2017. This section of the law deals with situations where tax has either not been paid or has been underpaid, potentially due to fraud or other reasons. It allows authorities to issue demands for the outstanding amounts, along with penalties and interest.

The notices were also issued under the respective state-specific GST Acts for Tamil Nadu and West Bengal. Zomato is preparing to appeal these orders, and as the situation develops, the company remains committed to pursuing all available legal avenues to resolve the matter in its favor.

Although the tax demands from Tamil Nadu and West Bengal authorities total over Rs 4.59 crore, Zomato does not expect these to have a significant financial impact on the company. Confident in its legal position, Zomato is gearing up for a strong defense as it challenges these orders in the appellate forums. The outcome of this legal battle will be closely watched by both the company and the industry.