Zomato and Swiggy, the top two food delivery platforms in the country, are reportedly being investigated by tax authorities. According to the report, notices totaling ₹750 crore have been sent to them.
Zomato, which holds the largest market share in India’s online food delivery industry, has allegedly received a Goods and Services Tax (GST) notice of ₹400 crore from the Directorate General of GST Intelligence (DGGI), as per insider sources.
Similarly, Swiggy has reportedly been issued a GST notice of ₹350 crore by the DGGI, according to sources familiar with the matter.
Neither of the food delivery companies has responded to the news at the moment.
Zomato and Swiggy have received tax notices from the DGGI because the authority categorizes their delivery operations as a service. The tax authority has determined that both companies are liable to pay GST on their services during the period from July 2017 to March 2023.
Zomato, the listed entity among the two, recently reported its earnings for the quarter ending September 2023. The company recorded a net profit of ₹36 crore, a significant improvement compared to a net loss of ₹251 crore in the same period last year. Its business activity’s revenue also witnessed substantial growth, reaching ₹2,848 crore, a 72 percent increase from ₹1,661 crore in the previous year’s period.
In May, Sriharsha Majety, the CEO of Swiggy which is an unlisted company as of now, announced in a blog post that the company had seen profit in the quarter ending March 2023.
Read Also: How to Respond GST Notice for GSTR 3B & GSTR 2A Mismatch?
During the trading session on November 22, Zomato’s stock settled at ₹115.25 per share on the BSE, experiencing a 1.07 percent decline compared to the previous day’s closing price.
