Now Delhi tax office demands Rs2.3 crore from Zomato over GST shortfall
The Delhi sales tax office issued the initial order, focusing on the purported GST payment shortfall in annual returns and the failure to reverse input tax credit for exempted supplies
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New Delhi: Zomato's recent encounter with tax issues was highlighted when it revealed receiving notices from tax authorities in Delhi and Karnataka. These notifications revolve around the alleged underpayment of goods and services tax (GST) in 2018, amounting to a substantial Rs 4.2 crore.
Responding to these tax demands, Zomato has announced its intention to appeal the notices. The company emphasized its prior submission of responses to earlier show-cause notices, expressing concern that the recent orders from authorities seemed to have been issued without taking these responses into account.
The Delhi sales tax office issued the initial order, focusing on the purported GST payment shortfall in annual returns and the failure to reverse input tax credit for exempted supplies. This order demands Rs 2.3 crore, inclusive of penalties. Zomato stated it had already made the required payments and furnished supporting documentation. The company is confident in its ability to present a robust defence to the appellate authorities, aiming to mitigate any potential financial impact.
In a separate instance, Zomato acknowledged an additional interest payment of Rs 40,611, attributed to a supposed miscalculation of interest on reversed excess input tax credit.
The third tax demand comes from the Karnataka GST department, seeking Rs 1.9 crore, inclusive of penalties and interest. This demand aligns with a previous Rs 402 crore show-cause notice Zomato received, asserting unpaid GST on delivery fees collected from customers. Zomato intends to dispute this notice too, arguing that it isn't liable for these taxes, emphasizing that it merely acts as a fee collector on behalf of its delivery partners.
This series of tax demands compounds Zomato's recent challenges in the taxation arena, adding to the pressure stemming from the earlier substantial show-cause notice related to delivery fees. The company remains resolute in its stance, asserting confidence in its legal and factual positions as it prepares to contest these demands before the appropriate authorities.
