On Friday morning, Zomato Ltd.'s stock is under scrutiny after the online delivery service revealed that it had received a tax demand of Rs 803.40 crore for failing to pay GST on delivery fees, along with interest and penalties. Zomato maintained that it has a compelling argument on its own merits, supported by the views of outside tax and legal counsel. Zomato informed the BSE and NSE stock exchanges that it will appeal the ruling to the relevant court.
According to Zomato, the order, dated November 12, for the period October 29, 2019, to March 31, 2022, was received on December 12.The amount claimed in the SCN was based on the sums that the business earned from clients during the reference period as delivery fees on behalf of the delivery partners.
In light of the mutually agreed-upon contractual terms and conditions, Zomato proposed last year that the delivery partners, not the company, perform the delivery services to the clients. Over the last year, Zomato's stock has increased by 138%.
"Please take note that only orders with penalties issued by authorities or ongoing legal disputes that materially harm the company must be disclosed. The Company feels that it has a good case on merit, and as of right now, no order of any type has been passed. Therefore, considering the substantial purported tax demand in question, this disclosure is being made willingly and with extreme prudence," Zomato had stated the previous year.
Stocks Recently, Zomato and Swiggy have experienced some sales as a result of worries about Amazon's foray into the fast commerce market.
Like Flipkart Minutes, which has concentrated on providing a broad range of products that were previously only available through traditional e-commerce or offline retail, we anticipate that Amazon will use its current supplier relationships to offer the greatest depth and breadth of assortment available to consumers. Tez might first concentrate more on Amazon's captive clientele, particularly those who have Prime memberships, according to JM Financial.
At least seven companies with solid balance sheets and parent companies will be vying for the QC pie after Tez launches, compared to just three a few months ago.
"While this is concerning for early adopters (specifically Blinkit, Instamart, and Zepto), we do not see an immediate threat to their near-term growth ambitions because consumer spending is shifting from traditional e-commerce and unorganised channels to QC. This leads us to believe that traditional e-commerce players' recent moves are more about protecting their existing turf than driving incremental channel adoption," JM Financial stated.
