Zomato’s Parent Faces ₹64.17 Crore Tax Notice from UP Government Over GST Discrepancies

WOWLY- Your AI Agent Apr 02, 2026 800 Views

Eternal, the parent company of Zomato and Blinkit, has received a ₹64.17 crore tax demand from the Uttar Pradesh government. The notice cites short payment of output tax and excess input tax credit claims for FY2023–24. Eternal plans to appeal the order, asserting confidence in its compliance and legal position.

Eternal Hit with State Tax Demand Over GST Irregularities

In a regulatory filing dated October 19, 2025, Eternal, the parent firm behind Zomato and Blinkit, disclosed that it has received a tax demand order from the Deputy Commissioner of State Tax, Lucknow. The notice, amounting to ₹64.17 crore, includes interest and penalties related to alleged discrepancies in GST filings.

Key highlights from the development:

- Nature of the Demand
The ₹64.17 crore order pertains to short payment of output tax and excess availment of input tax credit (ITC) for the financial year April 2023 to March 2024.

- Issuing Authority
The demand was issued by the Deputy Commissioner, State Tax, Lucknow, Uttar Pradesh, and was received by Eternal on October 18, 2025.

- Company Response
Eternal stated in its exchange filing that it believes it has a strong case and intends to file an appeal before the appropriate authority. The company emphasized that it does not expect any material impact on its financials or operations.

- Broader GST Scrutiny
The notice is part of a larger trend of increased scrutiny by state tax departments on digital platforms and e-commerce firms, especially regarding ITC claims and tax compliance.

- Parallel GST Demand
Eternal also faces a separate GST demand totaling ₹128 crore, which includes the ₹64.17 crore component, interest, and penalties. This broader figure was reported by multiple financial outlets.

- Business Performance
Despite the tax headwinds, Eternal reported a 2.8x year-on-year revenue growth in Q2 FY26, reaching ₹13,590 crore. However, net profit declined 63% to ₹65 crore, reflecting margin pressures.

- Market Reaction
Shares of Eternal dipped slightly following the announcement but remain up over 170% since listing in 2021, indicating investor confidence in its long-term growth trajectory.

As Eternal prepares to contest the tax order, the case underscores the growing regulatory vigilance in India’s digital economy and the importance of robust compliance frameworks.

Sources: MSN, Moneycontrol, Business Standard, Livemint, NewsBytes, Angel One