Jobaaj Stories
With a recent GST demand and penalty order totaling an astounding Rs 11.82 crore, foodtech giant Zomato has found itself in serious water. The directive, which was released by the Additional Commissioner of Central Goods and Services Tax, Gurugram, includes a demand for GST of Rs 5.9 crore in addition to an equivalent amount in penalties for the months of July 2017 through March 2021. The export services that Zomato offers to its overseas companies are the main focus of demand.
Zomato quickly said that it will be contesting the order in reaction to this development. The business reaffirmed its intention to appeal to the proper body and boasted about how strong its case was. Zomato highlighted that, throughout the show-cause notice period, it had addressed the charges in the past and had provided supporting documentation and court precedents. It regretted, nevertheless, that the tax officials seemed to have disregarded these attempts.
Zomato's strategic decision to reduce its overseas activities aligns with the timing of this demand. After liquidating its holdings in Vietnam, Poland, Singapore, the UK, the US, and South Africa, the corporation has been progressively winding down its international endeavors. Since overseas operations were determined to contribute very little to overall income, these closures are part of a larger strategic change that aims to refocus resources on core markets within India.
For Zomato and its founder Deepinder Goyal, the recent tax issue is not a unique incident. The company was hit with a huge service tax demand and penalty order totaling more than Rs 184 crore on April 2 for non-payment of outstanding invoices spanning from October 2014 to June 2017. Furthermore, the Karnataka Commercial Taxes Authority wanted Rs 23 crore on April 1st for purported disparities pertaining to excess input tax credit under the GST norms.
Zomato is nevertheless determined to overcome regulatory obstacles and seize expansion prospects in spite of these setbacks. The company's ability to bounce back from setbacks is a testament to its dedication to creativity and flexibility in the ever-changing food tech sector.
