Three different Goods and Services Tax (GST) orders with a total of more than Rs 40.3 crore were served on Eternal – the parent company of Zomato, Blinkit, and Hyperpure. The company plans to response by filing an appeal and anticipates no monetary impact.
The Joint GST Commissioner, Appeals-4, Bengaluru has sent three notices to Eternal, the parent company of Zomato, Blinkit, Hyperpure, and District, for a total of over Rs 40.3 crore in GST. The orders cover the period from July 2017 to March 2020.
A sum of Rs 17.2 crore of the total GST demand has been increased by Rs 21.4 crore as interest and Rs 1.7 crore as penalties, thus, the total liability becomes Rs 40.3 crore. The first draft is limited to the short payment of output tax, and the rest relate to the over-utilization of input tax credit.
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Moreover, in a statement to the exchanges, Eternal said it has “strong merit grounds, supported by the opinion of lawyers,” and intends to file appeals against all the three orders. Besides, the company gave the shareholders the comfort that it does not expect any financial impact from the GST notices.
This incident is an indication that even big and well-known companies are thoroughly examined under the Goods and Services Tax system in India. According to analysts, companies running multiple brands must be very careful when it comes to the input tax credit rules and calculations of output tax to be at ease with the regulatory risks.
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