Food delivery giant Zomato has said it is not liable to pay any tax on delivery charges responding to a notice served by the Directorate General of Goods and Services Tax Intelligence (DGGI).
As per the notice, Zomato was asked to pay 18 percent tax on delivery charges, which the DGGI claims falling under the services category.
The food delivery company has been asked to pay GST of Rs. 401 crore along with an interest and penalty for a period from October 29, 2019 to March 31, 2022.
Zomato has issued a written response which reads, The Company strongly believes that it is not liable to pay any tax since the delivery charge is collected by the Company on behalf of the delivery partners.
Further, in view of the contractual terms and conditions mutually agreed upon, the delivery partners have provided the delivery services to the customers and not the Company. This is also supported by opinions from our external legal and tax advisors.
The Company will be filing an appropriate response to the SCN, it adds.
As per reports, the GST Council in 2022 levied a five percent tax on food delivery services.
It also added restaurant services which led the companies to pay five percent tax.
