Zomato has seen its shares more than double in 2024, buoyed by increasing trends in food ordering and the rise of quick commerce. Credit: d_odin/Shutterstock.

Indian food delivery platform Zomato has been ordered by the country’s tax department to pay Rs8.04bn ($94.8m) for non-payment of taxes and penalties between 2019 to 2022.  

The directive includes a demand for Rs4.02bn in outstanding taxes and an equal amount as a penalty, as reported by Reuters. 

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The total amount sought by the tax authorities is more than four times the profit that Zomato reported in its latest quarter, from July to September 2024.   

Its consolidated net profit grew five-fold to Rs1.76bn ($20.94m) for the quarter ended 30 September.

Zomato intends to contest the charges, stating: “We believe that we have a strong case on merits which is backed by opinions from our external legal and tax advisors”. 

Zomato, alongside its competitor Swiggy, is under antitrust scrutiny for allegedly violating competition laws and favouring certain restaurants on their platforms. 

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In December 2023, the tax department questioned why the company should not be subject to the order and penalty.  

Zomato responded at the time that it “is not liable to pay any tax since the delivery charge is collected on behalf of the delivery partners” and that “delivery partners, not the company, provide the delivery services to the customers.” 

In early December 2024, Zomato raised more than Rs85bn via a qualified institutional placement in its first major fundraising following its public listing in 2021.  

In October, Zomato launched its order scheduling feature, providing customers with the flexibility to schedule food deliveries from two hours to two days in advance.