Mumbai: Food delivery aggregators Zomato and Swiggy are in hot soup over unpaid taxes on delivery charges collected from online customers.
Zomato has received a Good and Services Tax (GST) notice over tax liability of ₹401.7 crore.
The Directorate General of GST Intelligence (DGGI) sent tax demand notices to Zomato and Swiggy for non-payment of GST on delivery charges.
According to GST officials, the food delivery charges fall under the services category and the aggregators are liable to pay 18% GST.
The tax authority has demanded Zomato to pay penalties and interest from October 2019 to March 2022 over its inability to pay tax on delivery charges which it collected from customers on behalf of the delivery partners.
Zomato contests GST demand
Zomato has contested the GST demand stating it was not liable to pay any tax.
The food delivery giant responding to the GST notice said, "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."
Food delivery platforms are mandated from 1 January 2022 to collect and deposit GST on behalf of restaurants for the orders placed. The online food delivery aggregators argued that no clarity has been given on the delivery fees and gig workers operate as delivery workers for food delivery platforms and are paid on the basis of the number of orders delivered.