 "Zomato faces Rs 11.81 crore GST demand and penalty order, plans to appeal")
Food delivery giant Zomato disclosed on April 19 that it had received a Goods & Services Tax (GST) demand and penalty order amounting to Rs 11.81 crore for the July 2017 to March 2021 period.
The order comprised a GST demand of Rs 5.9 crore and a corresponding penalty of Rs 5.9 crore. In its regulatory filing after market hours on Friday, the company said that “the company has received an order for the period July 2017 to March 2021 passed by Additional Commissioner, Central Goods and Services Tax, Gurugram raising demand of GST of Rs 5,90,94,889 with applicable interest (not quantified) and penalty of Rs 5,90,94,889”.
This demand pertains to export services rendered by Zomato to subsidiaries outside India during the mentioned period.
In response to the show cause notice preceding the demand order, Zomato said that it had provided clarifications supported by documentation and legal precedents. However, the company expressed dissatisfaction with the authorities’ response, citing a lack of appreciation for their submissions.
Zomato intends to challenge the order by lodging an appeal with the relevant appellate authority.
On April 19, Zomato’s shares closed 1.78 per cent higher at Rs 188.50 on the NSE.
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Earlier in the week, Zomato introduced a new service called the ‘large order fleet’ to efficiently handle substantial orders for gatherings, parties, and events. Deepinder Goyal, the company CEO, made the announcement on X (formerly Twitter), highlighting that this fleet exclusively comprises electric vehicles.
Goyal underscored that this new fleet is tailored for gatherings hosting up to 50 individuals, addressing a previously unmet need in their service portfolio. He mentioned on the microblogging platform that these new vehicles should address most of the challenges faced by customers when placing large orders on Zomato.
Elaborating on the rationale behind this initiative, Goyal explained that Zomato had previously managed large orders through multiple delivery agents, leading to suboptimal customer experiences. While the new feature is still evolving, he said Zomato plans to incorporate additional features such as cooling compartments and hot boxes with temperature control.