Eternal Faces New GST Tax Demand Order of 64.9 Million Rupees

Jyoti Rathi - Kolkata Bureau Jun 10, 2026 1,500 Views

Eternal Limited has received a 64.9 million rupee GST demand order for the 2023–2024 fiscal year. The parent entity of Zomato and Blinkit plans to appeal the decision, citing a strong legal position and confidence in its compliance practices despite ongoing scrutiny from various state-level tax departments.

Eternal Limited, the parent organization behind major Indian consumer tech brands including Zomato and Blinkit, has received a Goods and Services Tax (GST) demand order amounting to 64.9 million rupees. The order, which encompasses tax, interest, and penalties for the period between April 2023 and March 2024, follows increased oversight of e-commerce and quick-commerce platforms by state tax authorities.

The latest notice adds to a growing list of regulatory challenges for the company as it navigates complex tax compliance requirements in the fast-paced digital economy. While the sum is significant, the company continues to maintain that its financial position remains insulated from any major impact, asserting that its tax practices align with professional advisory.

Nature of the GST Demand Order

According to regulatory filings, the tax authorities issued the demand order regarding alleged short payments of output tax and issues related to input tax credits. The demand of 64.9 million rupees includes a primary tax assessment, along with applicable interest payments and a specific penalty levied by the department.

This order is part of a broader trend where tax departments across various Indian states have been intensifying their audit of major technology platforms. Eternal has faced similar notices in the past, ranging from state-level tax disputes in Uttar Pradesh to West Bengal and Karnataka, primarily concerning fiscal years spanning from 2017 through 2024.

Company Stance and Legal Strategy

In its response to the regulatory notice, Eternal has reiterated its commitment to compliance. The firm stated that it believes it has a strong case on its merits and is currently in the process of preparing an appeal to be filed before the appropriate appellate authorities.

"According to officials at Eternal, the company maintains a strong case on the merits, backed by independent opinions from external legal and tax advisors," the company noted in its disclosure. The firm has consistently adopted a strategy of challenging these demands in court, asserting that the interpretations of the tax authorities regarding output tax and input credits often differ from their own internal tax accounting.

Why It Matters

For investors and market analysts, these periodic tax demand orders serve as a reminder of the regulatory headwinds facing large-scale digital platforms in India.

Financial Impact: While individual orders may not be material to the company's overall consolidated revenue, the cumulative frequency of these demands can create uncertainty regarding long-term operational costs.
Regulatory Scrutiny: The ongoing audits highlight a tightening tax environment for the "quick commerce" sector, which is currently undergoing rapid expansion across India.
Operational Transparency: The disclosure of these orders is part of the SEBI (Listing Obligations and Disclosure Requirements) regulations, ensuring that shareholders are kept informed of significant legal and financial contingencies.

Key Facts at a Glance

Total Demand Amount: 64.9 million rupees.
Reporting Period: April 2023 – March 2024.
Company Affected: Eternal Limited (Parent of Zomato, Blinkit, and others).
Current Status: Company plans to challenge the order through an official appeal.
Reasoning: Alleged short payment of output tax and input tax credit discrepancies.

Frequently Asked Questions (FAQ)

1. Is this the first time Eternal has received such a notice? No. Eternal has received multiple tax notices from various state authorities over the last few years related to different fiscal periods, including demands in West Bengal, Karnataka, and Uttar Pradesh.

2. Will this tax demand affect services for Zomato or Blinkit users? The company has stated in previous filings that it does not expect such tax demands to have a material impact on its operations, and users should see no change in platform services.

3. What does Eternal plan to do next? Eternal is planning to file an appeal with the appropriate tax appellate authority, where it will present its legal arguments against the demand order.

4. Where can I view the official company disclosures? The official statements regarding this tax order are available on the BSE India and NSE India websites under the company’s corporate filing section.