Shares of Zomato slipped 2% on 23 November after the company had received a Rs 400 crore notice from the country’s top indirect tax agency in regards to unpaid taxes.

The Directorate General of GST Intelligence had sent a tax demand notice worth Rs 400 crore to the food delivery giant on considering delivery as a service. The tax regulator found that the company is liable to pay the Goods and Services Tax (GST) from July 2017 to March 2023.

The company was charging their customers some money in the name of delivery fees.

According to the company, ‘delivery charge’ is the cost borne by the delivery partners who travel from door to door delivering orders, and the company simply collects that cost from the customers and passes it on to every delivery partner. However, the GST officials differ on this front.

In 2022, online delivery companies were asked to collect and deposit tax at a 5% rate on their orders. Prior to this, restaurants under the GST were tasked with collecting and depositing the tax.

In its quarterly report for July-September, the company reported a net profit of Rs 36 crore for the quarter from the Rs 251 crore net loss it reported in the year-ago quarter.

The revenue from operations of the company during the quarter saw a significant growth of 72% year-on-year to Rs 2,848 crore against Rs 1,661 crore reported in the same quarter of the previous fiscal year.

At 3:30 pm, the shares of Zomato closed 2.17% lower at Rs 112.80 on NSE.