Zomato receives tax demand notice of Rs 11.82 crore | Business News

Online food delivery platform Zomato is facing a tax demand and penalty order of Rs 11.82 crore related to GST on export services provided to its subsidiaries located outside India from July 2017 to March 2021. The order was issued by the Additional Commissioner, Central Goods and Services Tax, Gurugram, demanding Rs 5,90,94,889 in GST, along with applicable interest and penalty of the same amount.

In response to the order, Zomato stated, “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 company expressed confidence in its position and intends to challenge the tax demand and penalty.

The demand order confirmed that the GST on export services provided by Zomato to its overseas subsidiaries did not meet the conditions to qualify as an export of service under GST regulations. Despite providing clarifications and supporting documents in response to the show cause notice, Zomato feels that its arguments were not adequately considered by the authorities when issuing the order.

This development highlights the challenges faced by companies operating in the digital economy, where cross-border transactions and tax implications can be complex. Zomato’s decision to appeal the tax demand showcases its commitment to addressing regulatory issues and defending its position in the face of financial challenges.