Zomato, the prominent 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 between October 2014 and June 2017, based on sales conducted by the company’s foreign subsidiaries and branches to customers outside India. This information was shared by Zomato in a regulatory filing made late at night.
Response to Allegations
In its response to the show cause notice, Zomato clarified the allegations with supporting documents and legal precedents. However, the company expressed dissatisfaction, stating that its clarifications and evidence were seemingly not considered by the authorities when issuing the order.
According to the company, the Delhi Central Tax Commissioner (Adjudication) issued the order on April 1, demanding a service tax payment of Rs 92,09,90,306 for the specified period. The order also includes an unspecified amount of applicable interest and a penalty of Rs 92,09,90,306.
Filing an Appeal
Zomato has firmly stated its intention to contest the order by filing an appeal before the relevant authority. The company believes that it has a strong case on merit and is prepared to present its arguments and evidence to support its position.
This development underscores the regulatory challenges faced by companies operating in the digital economy, especially concerning tax compliance across international jurisdictions. Zomato’s proactive response to the service tax demand indicates its commitment to resolving legal matters in a transparent and lawful manner.
