Zomato received Rs 401 crore show cause notice for unpaid GST on delivery charges. The company will respond responsibly and disclaims liability.
Zomato and Swiggy received tax notices from the Directorate General of GST Intelligence (DGGI) for not clearing GST on delivery charges, according to media sources. Zomato owes Rs 401.7 crore in taxes. According to the report, delivery fees are services and subject to 18% GST.
After receiving the show cause notice, Zomato denied tax responsibility.
The company charges delivery partners. Zomato said its delivery partners served clients, not the company, per the contract.
The external legal and tax advisors concur. Zomato plans to address the show cause notice.
According to the newspaper, tax inspectors have asked Zomato pay fines and interest from October 2019 to March 2022.
Conclusion
Zomato received a Rs 401.7 crore GST notice. The DGGI penalized Zomato and Swiggy for not paying 18% GST on delivery. Zomato said its partners paid delivery fees. From October 2019 to March 2022, tax officials want penalties and interest.
