India’s tax department has ordered Zomato to pay 8.04 billion rupees ($94.8 million) in taxes and fines for non-payment of certain taxes from 2019 to 2022, the food delivery platform said on Thursday.
The order directs Zomato to pay 4.02 billion rupees in outstanding taxes and an identical amount as penalty, which totals to more than four times the profit the company made in the latest reported quarter of July to September.
Zomato said it would challenge the order.
“We believe that we have a strong case on merits which is backed by opinions from our external legal and tax advisors,” the company said.
This is the latest challenge for Zomato which, along with its rival Swiggy, is facing antitrust scrutiny for allegedly breaching competition laws and favouring selected restaurants listed on their platforms.
Aided by growing food “order-in” activity and a boom in quick-commerce – where cosmetics to milk are being delivered in under 10 minutes – Zomato’s shares have more than doubled so far this year.
In December last year, the tax department had asked the company why the order along with the penalty should not be levied.
Zomato had said at the time it “is not liable to pay any tax since the delivery charge is collected by the company on behalf of the delivery partners” and “delivery partners have provided the delivery services to the customers and not the company”.
Reuters
