{"id":49114,"date":"2024-12-13T13:30:00","date_gmt":"2024-12-13T08:00:00","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=49114"},"modified":"2025-03-27T18:56:40","modified_gmt":"2025-03-27T13:26:40","slug":"803-crore-gst-demand-hits-zomato-shares","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/803-crore-gst-demand-hits-zomato-shares\/","title":{"rendered":"\u20b9803 Crore GST Demand Hits Zomato: Shares Drop by 2.36% \u2014 Here\u2019s the Full Story"},"content":{"rendered":"
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Remember when Zomato was soaring high, fueled by the pandemic-induced food delivery boom? Well, the company has recently faced a significant setback. The tax<\/a> authorities have issued a hefty GST demand of over \u20b9803 on Zomato.<\/p>\n\n\n\n

This unexpected development has sent shockwaves through the market, leading to a 2.36% decline in Zomato’s stock price<\/a>. As investors grapple with this news, it raises questions about the company’s future prospects and potential impact on its financials.<\/p>\n\n\n\n

Let’s look into the details of this tax dispute and its implications for Zomato and its shareholders.<\/p>\n\n\n\n

The Tax Demand: Details and Context<\/strong><\/h2>\n\n\n\n

On December 12, 2024, Zomato revealed in a BSE<\/a> filing that it had received a tax demand order from the Joint Commissioner of CGST & Central Excise, Thane Commissionerate, Maharashtra. The order, dated November 12, 2024, confirmed a GST demand of \u20b9401.70 crore from October 29, 2019, to March 31, 2022. Additionally, the order imposed interest and penalties of the same amount, taking the total demand to \u20b9803.40 crore.<\/p>\n\n\n\n

The notice alleges that GST was not paid on delivery charges collected from customers during the specified period. Zomato stated that it plans to appeal the decision, emphasizing its confidence in a favorable outcome based on advice from external legal and tax advisors.<\/p>\n\n\n\n

Market Reaction to the GST Notice<\/strong><\/h2>\n\n\n\n

Following the announcement, Zomato\u2019s shares moved mixed on the National Stock Exchange<\/a> (BSE). After opening at \u20b9291.80, they climbed to \u20b9295 but closed at \u20b9284.9. The stock traded flat in the early hours today, oscillating between minor gains and losses. <\/p>\n\n\n\n

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Source: <\/strong>NSE<\/strong><\/a><\/figcaption><\/figure>\n\n\n\n

Despite the flat trading performance, Zomato\u2019s market capitalization remains robust at \u20b92.75 lakh crore<\/strong>. Notably, Zomato\u2019s stock reached a 52-week high of \u20b9304.50 on December 5, 2024<\/strong>, reflecting a significant 150% rebound from its 52-week low of \u20b9120.25<\/strong> recorded on December 21, 2023.<\/span><\/p>\n\n\n\n

Historical Background of the Tax Dispute<\/strong><\/h2>\n\n\n\n

This recent order isn\u2019t Zomato\u2019s first run-in with tax authorities. On December 27, 2023, Zomato disclosed that it had received a show cause notice (SCN)<\/strong> from the Directorate General of GST Intelligence, Pune Zonal Unit, under Section 74(1) of the CGST Act, 2017. The notice sought an explanation for an alleged tax liability of \u20b9401.70 crore for non-payment of GST on delivery charges collected on behalf of its delivery partners.<\/p>\n\n\n\n

The allegations were based on amounts collected as delivery charges from customers during the referred period. The latest demand order appears to be a continuation of this earlier investigation.
Source: <\/strong>BusinessToday<\/strong><\/a><\/p>\n\n\n\n

Financial and Business Performance<\/strong><\/h2>\n\n\n\n

Despite the tax controversy, Zomato has delivered robust financial performance and steady growth in its share price over the past year. Here\u2019s a snapshot of its financial trajectory:<\/p>\n\n\n\n

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Source: <\/strong>Zomato<\/strong><\/a><\/figcaption><\/figure>\n\n\n\n

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