Eternal, the parent company of India’s leading food delivery platform Zomato, has received a substantial Goods and Services Tax (GST) assessment from the Joint Commissioner, Appeals-4, Bengaluru. The three orders issued on August 25, 2025, covering the period July 2017 to March 2020, demand a total of ₹17.19 crore in GST, ₹21.42 crore in interest, and ₹1.71 crore in penalty.
This assessment period represents a critical phase in Zomato’s growth trajectory, coinciding with the initial implementation of India’s GST regime. During these years, digital platforms like Zomato were establishing operational frameworks while tax authorities were simultaneously developing interpretative guidelines for the new tax structure. The complexity of determining appropriate tax treatment for delivery charges, platform fees, and input tax credits has remained a contentious issue across the digital commerce sector.
Financial Impact on Company Performance
The financial breakdown includes the primary tax liability along with accumulated interest and penalties, reflecting the extended duration between the assessment period and the current orders. Eternal has maintained its position that the company possesses strong grounds for challenging these demands and intends to pursue appellate proceedings.
This development occurs against the backdrop of Zomato’s recent quarterly performance, with the company reporting revenue of ₹7,167 crore, representing approximately 70% growth from ₹4,206 crore in the previous year. However, net profitability declined by 35.89% sequentially from ₹39 crore in Q4 FY25. The additional tax liability, if upheld, could further impact the company’s financial metrics.
Broader Industry Implications for Digital Platforms
The broader implications extend beyond Zomato’s immediate concerns. This case highlights the ongoing regulatory evolution affecting India’s digital economy participants. Food delivery platforms, e-commerce marketplaces, and similar businesses continue to face retrospective assessments as tax authorities refine their understanding of platform-based business models.
Industry observers note that such disputes are becoming increasingly common as the government seeks to optimize tax collection from the rapidly expanding digital commerce sector. The resolution of Eternal’s case may establish important precedents for similar businesses operating in India’s dynamic digital marketplace.
For investors and stakeholders, the situation underscores the importance of regulatory compliance in India’s evolving tax landscape while demonstrating the complexities inherent in platform-based business operations.
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