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Online food delivery giant Zomato has found itself in the midst of a fiscal challenge, as it disclosed receiving a Goods and Services Tax (GST) demand notice totaling ₹9.5 crore from Karnataka’s Assistant Commissioner of Commercial Taxes (Audit). This development comes following an audit of Zomato’s GST returns and accounts for the fiscal year 2019-20.
The notice specifies a GST demand amounting to ₹5.01 crore, along with accrued interest of ₹3.93 crore and a penalty of ₹50.19 lakh. Despite providing detailed explanations and supporting documents in response to a prior show cause notice, Zomato’s submissions did not satisfy the tax authority.
In a proactive move, Zomato expressed confidence in its defense strategy before the appellate authority, downplaying any anticipated substantial financial impact from the notice. The company’s shares closed at ₹199.80 on Friday, reflecting stability amidst this regulatory challenge.
In parallel news, Zomato recently announced plans to expand its ‘restaurant services hub’ nationwide. This initiative aims to streamline operations for restaurants by offering comprehensive support in areas such as staffing, licensing, and operational essentials. By facilitating everything from locating ideal premises to securing suppliers and hiring personnel, Zomato intends to simplify the complexities faced by restaurant owners.
Zomato’s expansion initiative coincides with similar efforts by competitors like Swiggy, which recently launched a feature on its partner app to connect restaurants with specialized staffing services, underscoring the growing importance of comprehensive support systems in the fiercely competitive food delivery sector.
As Zomato prepares to navigate its legal challenge in Karnataka, industry analysts will be closely monitoring developments to assess potential implications for the broader tech-enabled service industry in India.
Sources By Agencies
