Deepinder Goyal-led Zomato gets Rs 803 crore GST demand notice, plans to appeal

Deepinder Goyal-led foodtech giant Zomato has been hit with a demand notice of Rs 803 crore from the Joint Commissioner of CGST & Central Excise, Thane Commissionerate, Maharashtra.

The adjudication order, issued under Section 74 of the Central Goods and Services Tax Act, 2017, cites alleged non-payment of GST on delivery charges for the period between October 29, 2019, and March 31, 2022. 

Demand includes penalties and interest

The total demand includes Rs 401.7 crore as GST dues, with an equal amount levied as penalties and interest.

"Adjudication Order dated 12 November 2024 passed under Section 74 of the Central Goods and Services Tax Act, 2017 for GST of INR 401,70,14,706/- (Rupees four hundred and one crores seventy lakhs fourteen thousand seven hundred and six only) with interest as applicable and penalty of INR 401,70,14,706/- (Rupees four hundred and one crores seventy lakhs fourteen thousand seven hundred and six only)," the company informed in an exchange filing.

Zomato received the communication on December 12, 2024, at 4:44 PM and intends to contest the order through an appeal supported by its external legal and tax advisors.

"We believe that we have a strong case on merits which is backed by opinions from our external legal and tax advisors. The Company will be filing an appeal against the order before the appropriate authority," the company added.

Zomato's financial performance

Despite the demand notice, Zomato has demonstrated impressive financial growth. For Q2 FY25, the company reported a 68.5% quarter-on-quarter increase in operating revenue, reaching Rs 4,799 crore, compared to Rs 2,848 crore in Q2 FY24. Net profits surged 4.8x to Rs 176 crore during the same period.

Meanwhile, Zomato's competitor, Swiggy, reported Rs 3,601 crore in revenue for the quarter but posted a net loss of Rs 625 crore. Swiggy's market capitalization stands at Rs 1,13,623 crore, highlighting Zomato's dominance in the sector.