The well-known food delivery giant Zomato recently disclosed that it has received a significant setback in the form of a GST demand and penalty order totaling Rs 11.81 crore for the period spanning from July 2017 to March 2021. According to a regulatory filing made on April 19, the order was split into a GST demand of Rs 5.9 crore and an equivalent penalty, issued by the Additional Commissioner of Central Goods and Services Tax, Gurugram. This order specifically relates to the export services provided by Zomato to its foreign subsidiaries during the mentioned timeline.
Despite Zomato's efforts to provide explanations and present supporting documents and legal references to clarify the allegations raised against them, the authorities proceeded to issue the demanding order. Expressing their disagreement with the decision, the company has voiced its intention to challenge the order before the rightful appellate authority. Zomato highlighted that the order underlines a demand for GST on export services provided to its subsidiaries located outside India during the specified period, while asserting that the services rendered failed to meet the required criteria for classification as an export of service under GST regulations.
In a previous instance from the past month, Zomato disclosed that it had received another GST order from the Deputy Commissioner of State Tax, Gujarat, related to the fiscal year 2018-19. This order required a payment of Rs 4,11,68,604 as GST, accompanied by additional interest and penalty charges, totaling Rs 8,57,77,696. The order resulted from an audit of the company's GST returns and accounts, illustrating a continued series of regulatory actions that Zomato is navigating through in recent times.