Food delivery behemoth Zomato has been hit with a substantial Goods and Services Tax (GST) demand notice by the Karnataka Commercial Taxes Department.

What Happened: The firm disclosed late on Saturday that it had received an order following an audit of its GST returns and accounts for the year 2019-20. The Assistant Commissioner of Commercial Taxes (Audit), Karnataka, has issued a GST demand of ₹5.01 crore, accompanied by an interest of ₹3.93 crore, and a penalty of ₹50.19 lakh.

The order is predicated on claims of excessive availing of input tax credit, interest, and the corresponding penalty. Zomato, on the other hand, has asserted that it has a compelling case and will be lodging an appeal against the order.

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“We believe that we have a strong case on merits and the company will be filing an appeal against the order before the appropriate authority,” the foodtech platform said in the exchange filing.

The company said that in its response to earlier show cause notice regarding the matter, it had provided a detailed clarification on the issue, supported by relevant documents and judicial precedents. However, these “appear to not have been appreciated by the authorities while passing the order,” the company added.

The firm has reassured its stakeholders that it does not foresee any financial repercussions due to this order.

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