Zomato receives ₹402 crore show cause notice for unpaid GST on delivery charges collected from customers

livemint.com:

Zomato Ltd, on December 28, announced that it has received show cause notice (SCN) from theGoods and Services Tax (GST) office for supposed tax liability of ₹401.7 crore, in addition to interest and penalty on the delivery fee collection from its customer from the period of 29 October 2019 to 31 March 2022. "Please note that Zomato Limited (‘the Company’) has received a show cause notice (‘SCN’) on 26 December 2023 under Section 74(1) of the Central Goods and Services Tax Act, 2017 from the Directorate General of GST Intelligence, Pune Zonal Unit.

The SCN requires the Company to show cause as to why an alleged tax liability of INR 401,70,14,706/- (INR Four Hundred and One Crore, Seventy lacs, Fourteen Thousand Seven Hundred and Six Only) along with interest and penalty for the period from 29 October 2019 to 31 March 2022 should not be demanded from the Company, Zomato said in an exchange filing. Zomato's stocks closed in green on December 27, up 1.64 per cent at ₹127.05, on BSE.

Additionally, the stocks closed in green during the same period, up 1.48 per cent, at ₹126.85, on NSE. “The amount alleged in the SCN is based on the amounts collected by the Company as delivery charges from the customers on behalf of the delivery partners during the referred period," the company further explained.

In another development, Mint reported that Zomato Live Entertainment, the events vertical of food delivery platform Zomato, is set to expand its reach by venturing into new cities and developing fresh intellectual properties (IPs). The move aligned with the company's recent launch of a dedicated tab on the Zomato app, that helps users discover and engage with highly anticipated events across cities.