Zomato faces GST demand in Karnataka

Zomato: This order sets a GST order of Rs 11,27,23,564, along with interest of Rs 10,86,68,351/—and a fine of Rs 1,12,72,356, for a total of Rs 23,26,64,271.

Zomato Limited, the popular restaurant aggregator and food delivery firm, disclosed to stock exchanges on March 31st about receiving a Goods and Services Tax (GST) order from the Assistant Commissioner of Commercial Taxes (Audit) in Karnataka. The order pertains to the financial year 2018-19.

Details of the Order

According to Zomato’s filing, the GST order demands a payment of Rs 11,27,23,564, along with additional interest and penalty charges totaling Rs 23,26,64,271.

The action taken by the tax authority is based on an Adjudication Order passed under Section 73(9) of the CGST Act, 2017, and KGST Act, 2017. 

This order imposes a GST demand of Rs 11,27,23,564, along with interest of Rs 10,86,68,351, and a penalty of Rs 1,12,72,356, summing up to Rs 23,26,64,271.

Response from Zomato

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Zomato received the order and related communications from the authority on March 30. The demand order is related to the alleged excess availment of input tax credit and interest, with penalties.

Despite responding to the show cause notice with clarifications supported by relevant documents and legal precedents, Zomato claims that the authorities did not fully consider this information when issuing the order.

Intent to Challenge

Expressing confidence in its position, Zomato has stated its intention to challenge the order before the appropriate authorities.

Previous Penalties

This recent development follows a GST penalty notice of Rs 8.6 crore issued to Zomato by the Deputy Commissioner of State Tax in Gujarat.