Zomato, on September 14, announced its intention to challenge a recent GST order from the West Bengal government demanding a total of Rs 5.6 crore for the period from April 2020 to March 2021, which includes GST, interest, and penalties.
In its initial disclosure on September 13, Zomato said that the company might pay the GST amount demanded due to the high cost of litigation. However, the company has now clarified that it intends to file an appeal against the order, rather than agreeing to pay the amount.
The original disclosure stated, "While the Company believes that it has a strong case on merits, however, given the amount involved and the cost of litigation, the Company shall pay the applicable amounts to the GST authorities." This was later revised, with Zomato now stating, "The Company believes that it has a strong case on merits and the Company will be filing an appeal against the order before the appropriate authority."
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The West Bengal government had issued an order demanding a total of Rs 5.6 crore in GST, with additional interest and penalty totalling over Rs 4 crore.
This is the second GST notice Zomato has received from West Bengal. On August 29, the company reported receiving a demand notice for Rs 3.69 crore related to GST on delivery charges for the period from April 2019 to March 2020. Zomato indicated it plans to appeal this notice as well.
In addition to these West Bengal notices, Zomato has encountered several other GST demands in recent months. This includes a notice for Rs 3.5 lakh from Delhi and a demand of Rs 4.59 crore from Tamil Nadu, both received in August. The company has also faced tax demands from authorities in Karnataka, Haryana, and Gujarat this year.
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Amidst these developments, Zomato has reported impressive financial growth. For Q1 FY25, the company's profit surged to Rs 253 crore from Rs 2 crore in the same quarter last year, while revenue from operations climbed 74 percent to Rs 4,206 crore from Rs 2,416 crore in Q1 FY24.
On September 12, Zomato shares had closed 3.7 percent lower at Rs 273.50. Shares of the company have gained 150 percent since the start of this year. This is a massive outperformance when compared to the Nifty 50, which gained close to 17 percent during the same period.
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