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Zomato shares drop 5% following Rs 402 crore GST tax notice; know the details – Times of India
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Zomato shares today: Shares of the food delivery platform, Zomato, have experienced a 5% decline, reaching Rs 120.7 on the Bombay Stock Exchange (BSE). The downturn was triggered by the issuance of a Rs 402-crore show-cause notice from the Goods and Services Tax (GST) authorities, citing unpaid dues.
Why GST authority sent the notice to Zomato
According to ET, the notice, issued on December 26 under Section 74(1) of the Central Goods and Services Tax Act, 2017, originated from the Directorate General of GST Intelligence, Pune Zonal Unit.Zomato is obligated to furnish a response elucidating why the purported tax liability of Rs 401.7 crore, coupled with interest and penalties for the period spanning October 29, 2019, to March 31, 2022, should not be imposed on the company.What the company said
In an official filing, Zomato contested the allegations, stating, “The amount alleged in the SCN is based on the amounts collected by the company as delivery charges from the customers on behalf of the delivery partners during the referred period. The company strongly believes that it is not liable to pay any tax since the delivery charge is collected by the company on behalf of the delivery partners.”
The company emphasised that, according to the agreed-upon contractual terms and conditions, the delivery partners provided services to the customers, and not the company. Zomato plans to submit a comprehensive response to the show-cause notice.
Why GST authority sent the notice to Zomato
According to ET, the notice, issued on December 26 under Section 74(1) of the Central Goods and Services Tax Act, 2017, originated from the Directorate General of GST Intelligence, Pune Zonal Unit.Zomato is obligated to furnish a response elucidating why the purported tax liability of Rs 401.7 crore, coupled with interest and penalties for the period spanning October 29, 2019, to March 31, 2022, should not be imposed on the company.What the company said
In an official filing, Zomato contested the allegations, stating, “The amount alleged in the SCN is based on the amounts collected by the company as delivery charges from the customers on behalf of the delivery partners during the referred period. The company strongly believes that it is not liable to pay any tax since the delivery charge is collected by the company on behalf of the delivery partners.”
The company emphasised that, according to the agreed-upon contractual terms and conditions, the delivery partners provided services to the customers, and not the company. Zomato plans to submit a comprehensive response to the show-cause notice.
As of 15:52 PM, the stock was trading 3.03% lower at Rs 123.20 on NSE. Despite the recent setback, Zomato has delivered impressive returns of over 105% to investors on a year-to-date basis.
Zomato has also clarified in the filing that, at present, no official order has been issued, and it firmly believes in the strength of its case.
