Online food delivery giant to appeal against tax demand and penalty, citing strong case on merits
Online food delivery platform Zomato has received a tax demand and penalty worth Rs 23.26 crore from Karnataka tax authorities, the company said on Sunday.
Responding to the Notice:
The company, however, said it believed it had a strong case on merits and it will be filing an appeal against the order before the appropriate authority. Zomato clarified that the demand order had been received for excess availment of input tax credit and interest penalty. Despite providing clarifications along with relevant documents and judicial precedents in response to the show cause notice, Zomato expressed dissatisfaction with the authorities’ decision.
Anticipating Legal Proceedings:
Zomato stated that it believes it has a strong case to defend the matter before the appellate authority. The company emphasized that it does not expect any financial impact as a result of these legal proceedings.
Previous Tax Notice:
Earlier this month, Zomato received a tax notice from the Deputy Commissioner of State Tax of Gujarat. The penalty was in relation to the audit of the company’s GST returns and accounts for the financial year 2018-19. The demand order Zomato received was due to the excess availment of input tax credit and short payment of GST.
Details of the Gujarat Notice:
Zomato disclosed that it received an order demanding a GST of Rs 4,11,68,604 along with applicable interest and penalty totaling to Rs 8,57,77,696 for the financial year 2018-19. However, the company expressed dissatisfaction, stating that these demands do not appear to have been fully accounted for by the authorities while passing the order.
