Online food delivery platform Zomato has received a tax demand and penalty worth Rs 23.26 crore from Karnataka tax authorities, the company said on Sunday. The company, however, said it believed it had a strong case on merits and it will be filing an appeal against the order before the appropriate authority.
Zomato said the demand order had been received for excess availment of input tax credit and interest penalty. “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 in an exchange filing.
“The company believes that it has a strong case to defend the matter before the appellate authority,” Zomato said, adding that it does not expect any financial impact on the company.
Earlier this month, Zomato got a tax notice from the Deputy Commissioner of State Tax of Gujarat. The penalty was in relation to the audit of the company’s GST returns and accounts for the financial year 2018-19. The demand order Zomato received was due to the excess availment of input tax credit and short payment of GST.
Zomato disclosed that it received an order demanding a GST of Rs 4,11,68,604 along with applicable interest and penalty totalling to Rs 8,57,77,696 for the financial year 2018-19. ‘’The company has received an order for FY 2018-19 pursuant to the audit of GST returns and accounts by the Deputy Commissioner of State Tax, Gujarat raising demand of GST of Rs 4,11,68,604/-, along with applicable interest and penalty totaling to Rs 8,57,77,696,” Zomato said.
Zomato stated that these do not appear to have been fully accounted for by the authorities while passing the order.
