Zomato's stock takes a 4% hit as the food delivery giant receives a show cause notice from GST authorities, worth Rs 401 crore
Zomato's shares experienced a significant downturn of over 4 percent on Thursday following the issuance of a show cause notice by the Directorate General of GST Intelligence. The notice pertains to an alleged tax liability amounting to INR 401 crore, along with associated interest and penalties.
The specified period for this potential liability ranges from 29 October 2019 to 31 March 2022.
"Please note that Zomato Limited (‘the Company’) has received a show cause notice (‘SCN’) on 26 December 2023 under Section 74(1) of the Central Goods and Services Tax Act, 2017 from the Directorate General of GST Intelligence, Pune Zonal Unit. The SCN requires the Company to show cause as to why an alleged tax liability of INR 401,70,14,706/- (INR Four Hundred and One Crore, Seventy lacs, Fourteen Thousand Seven Hundred and Six Only) along with interest and penalty for the period from 29 October 2019 to 31 March 2022 should not be demanded from the Company," the exchange filing stated.
At 11:10 am, the shares of Zomato were trading at Rs 122 price level, up by 3.82 per cent on the National Stock Exchange.
The company reported robust earning figures in the quarter ending September, along with double-digit profits. Zomato reported a consolidated net profit of Rs 36 crore. The company's revenue from operations rose by 71.46 per cent to Rs 2,848 crore as compared to the same quarter last year.
On a year-to-date basis, the shares of the food delivery firm have soared to more than 102 per cent or 61 points on the National Stock Exchange.