In a significant development that has sent ripples through India's startup ecosystem, Zomato's parent company Eternal has been served with a substantial tax notice amounting to ₹64.17 crore by the Uttar Pradesh commercial tax department.
The Tax Demand Breakdown
The notice specifically targets alleged Goods and Services Tax (GST) liabilities for the financial year spanning 2022-2023. According to regulatory filings accessed by Mint, the demand comprises multiple components that have raised eyebrows in corporate circles.
The tax breakdown reveals:
- ₹34.17 crore as the principal tax amount
- An additional ₹30 crore imposed as penalty charges
- The notice includes accrued interest on the outstanding amount
Company's Official Stance
Zomato has responded to the development with a measured approach. In their official statement, the food delivery giant expressed confidence in their legal position while maintaining transparency with stakeholders.
"We believe we have a strong case on merits and intend to file an appropriate response to the notice," the company stated in regulatory filings. This suggests that Eternal plans to contest the tax demand through proper legal channels.
Broader Implications for Tech Industry
This development comes at a time when Indian tax authorities are increasingly scrutinizing technology companies and their compliance with the country's complex GST framework. The substantial amount involved in this particular case highlights the growing focus on the digital economy and food delivery sector.
Industry experts are closely watching how this situation unfolds, as it could set precedents for similar cases involving other technology-driven businesses operating in multiple states across India.
What's Next for Eternal?
The company has indicated that it will pursue all available legal remedies to address the tax notice. Given the significant financial implications, market analysts expect Eternal to mount a robust defense against the allegations.
This case also underscores the importance of comprehensive tax compliance for rapidly scaling technology companies in India's evolving regulatory landscape.
