Food delivery giant Zomato has received GST demand orders totaling over Rs 4.59 crore from the tax authorities of Tamil Nadu and West Bengal.
These claims include interest and penalties. The company, in a filing with the Stock Exchange, said it plans to challenge these orders in the appropriate appellate forums.
Details of the tax claim
The tax notices were issued by the Deputy Commissioner of GST and Central Excise in Tamil Nadu and the Deputy Commissioner of Revenue in West Bengal.
The Tamil Nadu authority is demanding payment of Rs 81,16,518 as GST along with a penalty of Rs 821,290. The amount of interest applicable is yet to be quantified.
The West Bengal authority’s demand is significantly higher at Rs 1,92,43,792 in GST, with an interest charge of Rs 1,58,12,070 and a penalty of Rs 19,24,379.
Zomato’s response to notices
Zomato said it had provided a response to the authorities, which included relevant documents and court precedents. However, the company claims that the authorities did not fully consider this information before issuing the orders.
Zomato has expressed confidence in its ability to defend itself against these tax claims and believes it has a strong case to appeal.
The tax demands were issued under Section 73 of the Central Goods and Services Tax Act, 2017, as well as the respective state-specific GST Acts for Tamil Nadu and West Bengal.
This section of the law deals with cases where tax has not been paid or has been underpaid, whether due to fraud or other reasons, and allows authorities to issue claims for the outstanding amounts along with penalties and interest.
Despite the significant sums involved, Zomato has stated that it does not expect these tax demands to have a financial impact on the company. The company is preparing to appeal the orders and remains confident in its legal position. As the situation evolves, Zomato will continue to pursue all available legal avenues to resolve the matter in its favour, it stated.
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