Zomato Announces Receipt of Rs 803.4 Crore Tax Demand from GST Department

Food delivery platform Zomato revealed on Thursday that it has been served with a significant tax demand amounting to Rs 803.4 crore, inclusive of interest and penalty, by the GST department in Thane. The demand is tied to the non-payment of GST on delivery charges from October 29, 2019, to March 31, 2022, as stated in the company's regulatory filing.

The order mandates Zomato to settle Rs 401.7 crore in outstanding taxes and an equivalent amount as a penalty. This total demand surpasses four times Zomato's profit for the July-September 2024 quarter. Zomato has expressed its intention to contest the decision, asserting that it has a robust case supported by external legal and tax advisors.

The GST department initially raised this issue in December 2023, prompting Zomato to argue that it was not liable for the tax as the delivery charge was collected on behalf of delivery partners. This tax demand adds to Zomato's existing challenges, including scrutiny for potential competition law violations and preferential treatment of certain restaurants on its platform.