Zomato receives GST penalty notice for Rs 23.26 Cr from Karnataka tax authority

Food and grocery delivery firm Zomato has received a GST demand notice from the Assistant Commissioner of Commercial Taxes (Audit), Karnataka, demanding GST of Rs 11.27 crore. With applicable interest and penalty, the amount totals to Rs 23.26 crore for the financial year 2018-19.

In a filing with the stock exchanges, the Deepinder Goyal-led company said that the Karnataka tax authority has raised demand for GST of Rs 11.27 crore plus interest of Rs 10.86 crore and a penalty of Rs 1.12 crore.

The demand order has been received in respect of excess availment of input tax credit, the firm said in the filing.

“The company in its response to the show cause notice had clarified on the issue along with relevant documents and judicial precedents, which appears to not have been appreciated by the authorities while passing the order,” it said.

"The company believes that it has a strong case to defend the matter before the appellate authority and does not expect any financial impact on the company," the filling added.

This comes days after the Gurugram-based company received a similar order from Gujarat’s Deputy Commissioner of State Tax for GST totalling to Rs 8.57 crore. This was received in respect of excess availment of input tax credit and short payment of GST on account of audit observations, according to a separate exchange filing.

In December last year, Zomato received three demand orders from authorities in Delhi and Karnataka over alleged short payment of GST.

It was also served a Rs 401.7 crore GST liability show cause notice over delivery charges, the company said in a regulatory filing. Zomato, however, asserted that it is not liable to pay the amount, as the delivery charge is collected by it on behalf of delivery partners.