Zomato, the leading online food delivery platform, disclosed that it has received a service tax demand and penalty order totaling over Rs 184 crore. The company intends to challenge this order by filing an appeal before the appropriate authority.
The demand order pertains to alleged non-payment of service tax covering the period from October 2014 to June 2017. It is based on sales conducted by Zomato’s foreign subsidiaries and branches to customers located outside India, as indicated in a regulatory filing made by the company.
Zomato emphasized that it had responded to the show cause notice, providing clarifications on the allegations supported by relevant documents and legal precedents. However, the authorities’ appreciation of this response appears to be lacking, leading to the issuance of the order.
The order, issued by the Delhi Central Tax Commissioner (Adjudication) on April 1, mandates a service tax demand of Rs 92,09,90,306, coupled with applicable interest (not quantified) and an equivalent penalty amount.
In response to this development, Zomato stated its intention to contest the order, citing confidence in the strength of its case based on merit. The company is prepared to pursue legal avenues to address the issue effectively.