Zomato gets ₹3.7 crore GST notice: West Bengal Tax Department sends order with interest and penalty; Company preparing to go to court

The troubles of Eternal, the parent company of food delivery platform Zomato and quick commerce service Blinkit, seem to be increasing. The Goods and Services Tax (GST) department of West Bengal has sent a demand order of ₹3.7 crore to the company.

This matter is related to the shortfall in tax payment during the financial year 2019-20. The company has confirmed this notice in the information given to the stock market on Tuesday evening.

Case of shortfall in payment of output tax

Additional Commissioner of State Tax, West Bengal has passed this order. Eternal said in its regulatory filing that this demand order is mainly related to ‘short payment of output tax’.

That is, the department believes that the company has paid less tax than it should have deposited during that period. Now, along with the outstanding tax, the department has also imposed heavy interest and penalty on it.

Calculation of tax, interest and penalty

The total notice of around ₹3.7 crore received by Eternal consists of three parts…

If we look at the figures in the notice, interest accounts for almost the same portion as the basic tax, which has become a huge financial liability for the company.

Disturbances between April 2019 and March 2020

This whole matter is 5 years old. The West Bengal Tax Department has issued this order after examining the records of the financial year 2019-20. Eternal said that they received this order on January 6, 2026. At that time, the department had found irregularities in the tax calculations during the functioning of Zomato and its associate companies.

The company said- will appeal in the court

On this matter, the company says that they do not agree with this decision of the department. “We believe our case is strong on the merits. We are in the process of filing an appeal against this order before the appropriate authority,” Eternal said in a statement. The company hopes that by presenting its views to higher officials, it can get relief from this demand.

What will be the impact on investors and the market?

Zomato is a listed company under Eternal. In such a situation, news like GST notice affects the sentiments of investors. Although the amount of ₹3.7 crore is not huge compared to the total turnover of the company, challenges related to tax compliance often put pressure on the brand image and share prices.

What is output tax and demand order?

When a company sells its service (such as delivery), the GST it charges the customer is called ‘output tax’. From this, the company deducts the tax (input tax credit) paid on the things it purchases and deposits the remaining amount to the government. If the government feels that the company has made a mistake in calculation or has paid less tax, then it issues a ‘demand order’.