Zomato faces financial hurdle over Rs 402 crore unpaid GST notice

Zomato, the well-known food delivery service, is facing a financial hurdle after receiving a show cause notice from the Goods and Services Tax (GST) authorities for an unpaid sum of Rs 402 crore, relevant to the period from October 29, 2019, to March 31, 2022.

The dispute is centred around the government's demand for GST on delivery charges that Zomato collects from its customers. As reported by Economic Times, pre-demand notices were issued by the Directorate General of GST Intelligence (DGGI) in November to leading food delivery platforms, including Zomato and Swiggy, seeking a total of Rs 750 crore in GST payments.

Zomato has strongly contested its liability to meet these tax obligations, maintaining that it merely acts as a fee collector for its delivery partners. In its official response filed with the Bombay Stock Exchange (BSE), Zomato has indicated its plan to submit a detailed response to the notice.

The company's argument is based on the mutually agreed contractual terms and conditions, highlighting that the delivery partners are the direct service providers to customers, thereby exempting Zomato from direct tax responsibility.