Shares of Zomato Ltd., a restaurant aggregator and operator of Blinkit, dropped more than 2% on 13 December after the company received a tax demand notice from the GST department. 

The meal delivery company has been ordered by the Thane Commissionerate, Maharashtra’s Joint Commissioner of CGST & Central Excise, to pay Rs 401.7 crore in GST, interest where applicable, and a penalty of Rs 401.7 crore for the period of 29 October 2019, to 31 March 2022. The demand order totals to Rs 803.4 crore.

“The demand order has been received in respect of non-payment of GST on delivery charges with interest and penalty thereon,” said the firm in a filing with the exchanges.

Zomato is confident of its position and will fight the case. “We believe that we have a strong case on merits, supported by opinions from our external legal and tax advisors. We will be filing an appeal against this order before the appropriate authority,” said Zomato.

The company collected Rs 8,500 crore through a Qualified Institutional Placement (QIP) in November, allocating 33.65 crore equity shares at a price of Rs 252.62 each. 

A significant portion of the profits, Rs 2,137 crore, would be used to expand Zomato’s fast commerce business, Blinkit, particularly through investments in dark stores and warehouses.

However, at 2:29 pm, the shares of Zomato were trading 1.14% higher at Rs 288.10 on NSE. 

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