Urban Company hit with Rs 56 crore GST demand; here’s what the company said

Gurugram-based Urban Company has received a goods and services tax (GST) demand and penalty totalling Rs 56.43 crore from Maharashtra GST authorities, escalating a long-running dispute over how certain services offered on its platform should be classified for tax purposes.

In a regulatory filing, Urban Company Limited said the Joint Commissioner of CGST and Central Excise, Thane, passed an order on December 19, 2025, confirming a GST demand of Rs 51.30 crore along with a penalty of Rs 5.13 crore for the period from April 2021 to March 2025. Interest would also apply as per the provisions of the CGST Act, 2017.

The company said it would appeal the order before the appropriate authority.

The case relates to alleged non-payment of GST under Section 9(5) of the CGST Act, which makes ecommerce operators liable to pay tax on certain notified services.

Urban Company said it has been discharging GST at the rate of 5% on payments made to professionals providing plumbing, carpentry, electrician and cleaning services, treating these offerings as housekeeping services under the law.

However, the Thane GST authority has taken the view that the scope of housekeeping services under Section 9(5) also extends to appliance repair, appliance servicing and painting services. Based on this interpretation, the department raised a tax demand on payouts made to service professionals rendering these services during the period under review.

“The Company will be filing an appeal against the order before the appropriate authority. We believe that we have a strong case on merits, supported by the opinion of our external legal and tax advisors,” Urban Company said in its filing.

The company also said the order would not have any impact on its financial position, operations or other activities.

This is not Urban Company’s first dispute with GST authorities. The company is already contesting at least three other demand notices totalling Rs 51.3 crore from GST departments in Haryana, Maharashtra and Tamil Nadu.

Haryana authorities have issued a demand of Rs 20.4 crore linked to an expanded definition of housekeeping services and mismatches between GSTR-2A and input tax credit claimed for 2018-19. Maharashtra officials have separately raised a demand of Rs 14.6 crore over GST on commission income earned in the state but deposited in Haryana, while Tamil Nadu authorities have issued a Rs 15.97 crore demand after considering the full value of services supplied. All these notices are under dispute.

Founded in 2014, Urban Company operates a hyperlocal services platform connecting consumers with service professionals. In recent years, it has expanded into consumer electronics through its ‘Native’ product line and launched ‘Insta Help’, a 15-minute maid booking service.

The company reported a net loss of Rs 59.3 crore in Q2 FY26, a sharp increase from Rs 1.8 crore in the same quarter last year. Operating revenue rose 37% year on year and 4% sequentially to Rs 380 crore during the quarter.