14th June 2024
On-line meals ordering platform Zomato has acquired a Rs 402 crore present trigger discover from the products and companies tax (GST) authorities over unpaid tax on supply costs collected from clients, the corporate stated in a BSE submitting late Wednesday.

The Gurugram-based firm stated it acquired the discover on December 26 to indicate trigger as to why an alleged tax legal responsibility of the stated quantity for the interval October 29, 2019 to March 31, 2022 shouldn’t be demanded from the corporate.

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In November, the Directorate Common of GST Intelligence (DGGI) had issued pre-demand notices to Zomato in addition to its Bengaluru-based rival Swiggy, searching for GST of Rs 750 crore.
The important thing level of rivalry right here is that the federal government is asking the meals supply platforms to pay GST on supply charges collected by them from the purchasers, whereas the businesses argue that the stated costs are solely collected on behalf of supply companions.

“The corporate strongly believes that it isn’t liable to pay any tax because the supply cost is collected by the corporate on behalf of the supply companions. Additional, in view of the contractual phrases and circumstances mutually agreed upon, the supply companions have supplied the supply companies to the purchasers and never the corporate. That is additionally supported by opinions from our exterior authorized and tax advisors. The corporate can be submitting an acceptable response to the SCN (present trigger discover),” it stated within the submitting.

Additionally learn | Tax troubles: Swiggy and Zomato grapple with freshly served GST discover on supply charge

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Starting January 1, 2022, meals supply platforms are liable to gather and deposit GST on behalf of eating places for gross sales made by means of them. Nevertheless, no readability was supplied on the supply charge element.Sometimes, within the case of aggregators like Zomato and Swiggy, gig employees function as supply companions, and are paid based mostly on the orders serviced. Customers are charged a charge for this supply, besides in loyalty programmes beneath which the platforms waive the costs.

ET had reported on November 24 that the businesses have been participating with attorneys and tax consultants whereas additionally planning to strategy the federal government to make clear their stance.

“At this stage, no order of any variety has been handed and as talked about above, the corporate believes that it has a robust case on benefit,” Zomato stated in its submitting.

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