In a significant development for India’s food delivery giant, Zomato’s parent company Eternal Consumer Brands has received a Goods and Services Tax (GST) demand notice amounting to Rs 3.7 crore. The notice, issued by the tax authorities, highlights ongoing scrutiny of digital and quick commerce platforms amid evolving tax regulations.
Eternal, which spearheads popular services like Blinkit under the Zomato umbrella, is now under the spotlight for alleged GST shortfalls. Sources familiar with the matter indicate the demand pertains to specific periods where tax computations on transactions were contested. This comes at a time when quick commerce firms are rapidly expanding, raising questions about compliance in high-volume, low-margin operations.
The company has acknowledged receipt of the notice but emphasized that it is evaluating the claims with legal and tax experts. ‘We are committed to full compliance with all tax laws and will respond appropriately to the authorities,’ a spokesperson stated. Industry observers note that such notices are increasingly common as GST rules adapt to the nuances of online marketplaces.
For Zomato, already navigating competitive pressures in food delivery and quick commerce, this adds another layer of regulatory challenge. Blinkit, acquired to bolster its ultra-fast delivery ambitions, has been a growth engine, but tax disputes could impact investor sentiment. Shares of Zomato dipped marginally in early trading following the news.
Experts point out that GST demands on e-commerce often stem from discrepancies in input tax credits or classification of services. With Eternal’s diverse portfolio spanning consumer brands and logistics, the resolution could set precedents for similar firms. As the company prepares its reply, stakeholders await clarity on potential appeals or payments.
This episode underscores the maturing regulatory landscape for India’s digital economy. While platforms like Zomato have revolutionized consumer access, ensuring fiscal transparency remains paramount. The outcome of this Rs 3.7 crore showdown will likely influence future audits across the sector.