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Zomato, one of India’s leading food and grocery delivery platforms, has secured relief from tax authorities after a demand for Rs 5.91 crore in Goods and Services Tax (GST) was set aside.
The Commissioner (Appeals) in Gurugram, Haryana, overturned an earlier order from the Additional Commissioner of CGST in Gurugram, who had raised the demand for the period from July 2017 to March 2021. The total amount, including penalty and interest, had come to Rs 11.82 crore.
Favorable ruling for Zomato
Zomato said in a regulatory filing that it received the favourable ruling on Feb. 3, dropping the demand that the company had contested since April last year.
The company said that it saw no merit in the claim, which was based on export services provided by Zomato to its foreign subsidiaries.
Other tax challenges
Zomato continues to face scrutiny from tax authorities across the country. In December, it received a separate demand notice of Rs 803 crore from the Joint Commissioner of CGST and Central Excise, Thane, for the period between October 2019 and March 2022.
The company is currently appealing against that claim, assuring investors that it is complying with legal requirements.
Recent financial performance
Despite these tax issues, Zomato has reported strong growth in revenue. In its earnings results for the third quarter of FY25, the company reported a 64.4% year-on-year increase in revenue, rising to Rs 5,405 crore from Rs 3,288 crore in the same period the previous year. However, its net profit declined by 57.2% to Rs 59 crore.
In November, Zomato successfully raised Rs 8,500 crore (about $1 billion) through a Qualified Institutions Placement. It later became the first Indian startup to join the BSE Sensex 30 when it replaced JSW Steel.