Zomato on discover for Rs 401 crore unpaid GST

Zomato mentioned it would present applicable response to the present trigger discover.

Meals supply big Zomato has obtained a Items and Providers Tax (GST) notification on a tax legal responsibility of Rs 401.7 crore. The Directorate Basic of Items and Providers Tax Intelligence (DGGI) has despatched tax notices to Zomato and Swiggy for non-payment of GST on supply costs and mentioned that the supply costs fall beneath the class of companies and the businesses are liable to pay 18 per cent GST.

Zomato responded to the present trigger discover issued by the DGGI and mentioned that it was not liable to pay any tax and mentioned, “The corporate collects the supply costs on behalf of the supply companions. Furthermore, in view of the mutually agreed contractual phrases and situations, it\’s the supply companions who\’ve supplied the supply companies.” For purchasers, not for the corporate.

\”That is additionally supported by the opinions of our exterior authorized and tax advisors. The corporate will present an applicable response to the present trigger discover,\” Zomato mentioned in a disclosure assertion.

The IRS requested Zomato to pay penalties and curiosity from October 2019 to March 2022 because of its incapacity to pay tax on supply costs it collected from clients on behalf of supply companions.

Zomato is a publicly listed firm and mentioned: “Solely orders which have been sanctioned by authorities or pending litigation/dispute which has a cloth antagonistic impression on the corporate ought to be disclosed. At this stage, no order of any type has been issued.” ACKNOWLEDGMENT As said above, the Firm believes it has a powerful case on benefit. Subsequently, this disclosure is made voluntarily and out of an abundance of warning given the allegedly massive tax demand concerned.”

When a buyer orders meals from Zomato or Swiggy, there are three parts within the invoice. First, meals costs. Secondly, supply charges are waived for patrons who\’ve subscriptions to the platform. Third, a 5 % tax on meals and pallet charges.

In January 2022, the GST Council introduced a 5 per cent tax on meals supply companies and added \’restaurant companies\’ beneath the GST purview, leading to platforms like Zomato and Swiggy paying 5 per cent GST as \’restaurant companies\’ \”.

In October, Swiggy raised the platform\’s costs on meals supply orders to Rs 3 from Rs 2. The rise in platform charges was applied on October 4, Business standard talked about. Platform charges are charged together with supply charges.