Food delivery company Zomato has received a Good and Services Tax (GST) notice over a tax liability of Rs 401.7 crore, according to media report which added that the Directorate General of GST Intelligence (DGGI) had issued tax notices to Zomato and Swiggy for allegedly not clearing GST on delivery charges. It said that delivery charges come under the services category and they are liable to pay 18 per cent GST, the report said.
In its response to the show cause notice, Zomato said that it is not liable to pay the tax.
“The delivery charge is collected by the company on behalf of the delivery partners. Further, in view of the contractual terms and conditions mutually agreed upon, the delivery partners have provided the delivery services to the customers and not the company,” Zomato said in a disclosure statement.
"This is also supported by opinions from our external legal and tax advisors. The Company will be filing an appropriate response to the show cause notice," Zomato added.
According to the report, Zomato has been asked by the tax authorities to pay penalties and interest from October 2019 to March 2022.
