{"id":4960,"date":"2025-10-23T02:32:56","date_gmt":"2025-10-23T02:32:56","guid":{"rendered":"https:\/\/founderlabs.in\/?p=4960"},"modified":"2025-10-23T02:34:39","modified_gmt":"2025-10-23T02:34:39","slug":"zomato-parent-faces-another-tax-hurdle-amid-blinkit-boom","status":"publish","type":"post","link":"https:\/\/www.founderlabs.in\/?p=4960","title":{"rendered":"Zomato Parent Faces Another Tax Hurdle Amid Blinkit Boom"},"content":{"rendered":"<p data-start=\"357\" data-end=\"722\">Adding to its growing list of tax troubles, <strong data-start=\"401\" data-end=\"412\">Eternal<\/strong> \u2014 the parent company of <strong data-start=\"437\" data-end=\"447\">Zomato<\/strong> and <strong data-start=\"452\" data-end=\"463\">Blinkit<\/strong> \u2014 has been slapped with a <strong data-start=\"490\" data-end=\"517\">\u20b9128.4 crore GST demand<\/strong> by the <strong data-start=\"525\" data-end=\"563\">Uttar Pradesh State Tax Department<\/strong>. The order includes a <strong data-start=\"586\" data-end=\"615\">tax demand of \u20b964.2 crore<\/strong> and an equivalent <strong data-start=\"634\" data-end=\"660\">penalty of \u20b964.2 crore<\/strong>, covering the period between <strong data-start=\"690\" data-end=\"719\">April 2023 and March 2024<\/strong>.<\/p>\n<p data-start=\"724\" data-end=\"1069\">The notice, issued by the <strong data-start=\"750\" data-end=\"797\">Deputy Commissioner of State Tax in Lucknow<\/strong>, alleges <strong data-start=\"807\" data-end=\"838\">short payment of output tax<\/strong> and <strong data-start=\"843\" data-end=\"883\">excess availment of input tax credit<\/strong>. Eternal disclosed the development in a <strong data-start=\"924\" data-end=\"955\">regulatory filing on Sunday<\/strong>, stating that it intends to <strong data-start=\"984\" data-end=\"1005\">contest the order<\/strong> and will <strong data-start=\"1015\" data-end=\"1033\">file an appeal<\/strong> before the appropriate authority. Eternal, however, maintained that it has a <strong data-start=\"1290\" data-end=\"1315\">strong case on merits<\/strong> and expressed confidence in its position.<\/p>\n<h3 data-start=\"1366\" data-end=\"1413\"><strong data-start=\"1370\" data-end=\"1413\">A Pattern of Tax Scrutiny Across States<\/strong><\/h3>\n<p data-start=\"1415\" data-end=\"1933\">This is not the first time Eternal has come under the tax radar. Over the past two years, the company has received <strong data-start=\"1530\" data-end=\"1562\">multiple GST-related notices<\/strong> from authorities across India. These include a \u20b9401.7 crore demand from Maharashtra in late 2023, \u20b92.2 crore from Delhi in May 2024, \u20b94.6 crore from Tamil Nadu in August 2024, \u20b917.7 crore from West Bengal in September 2024, \u20b9803.4 crore from Maharashtra again in December 2024, \u20b91.3 crore from Uttar Pradesh in August 2025, and \u20b940 crore from Karnataka in August 2025.<\/p>\n<p data-start=\"1935\" data-end=\"2177\">While such notices are not uncommon for large digital platforms handling high transaction volumes, the frequency and size of Eternal\u2019s demands highlight the <strong data-start=\"2092\" data-end=\"2149\">increasing scrutiny of tech-driven consumer companies<\/strong> under India\u2019s GST regime.<\/p>\n<h3 data-start=\"2184\" data-end=\"2234\"><strong data-start=\"2188\" data-end=\"2234\">Profit Under Pressure Despite Revenue Boom<\/strong><\/h3>\n<p data-start=\"2236\" data-end=\"2634\">The latest tax demand comes just after Eternal announced its <strong data-start=\"2297\" data-end=\"2326\">Q2 FY26 financial results<\/strong>, which painted a mixed picture. The company\u2019s <strong data-start=\"2373\" data-end=\"2400\">consolidated net profit<\/strong> plunged <strong data-start=\"2409\" data-end=\"2429\">63% year-on-year<\/strong> to \u20b965 crore, compared with \u20b9176 crore in the same quarter last year. However, its <strong data-start=\"2513\" data-end=\"2546\">operating revenue surged 183%<\/strong>, reaching <strong data-start=\"2557\" data-end=\"2574\">\u20b913,590 crore<\/strong>, primarily powered by <strong data-start=\"2597\" data-end=\"2631\">Blinkit\u2019s breakout performance<\/strong>.<\/p>\n<p data-start=\"2636\" data-end=\"2984\">Blinkit\u2019s revenue jumped nearly <strong data-start=\"2668\" data-end=\"2693\">ninefold year-on-year<\/strong> to <strong data-start=\"2697\" data-end=\"2713\">\u20b99,891 crore<\/strong>, after the quick commerce platform transitioned to an <strong data-start=\"2768\" data-end=\"2791\">inventory-led model<\/strong>. The move gave Eternal greater control over <strong data-start=\"2836\" data-end=\"2893\">pricing, product assortment, and delivery reliability<\/strong>, but it also increased capital requirements for <strong data-start=\"2942\" data-end=\"2981\">dark stores and logistics expansion<\/strong>.<\/p>\n<p data-start=\"2986\" data-end=\"3314\">Meanwhile, Zomato\u2019s core <strong data-start=\"3011\" data-end=\"3036\">food delivery segment<\/strong> has seen <strong data-start=\"3046\" data-end=\"3063\">slower growth<\/strong>, weighed down by <strong data-start=\"3081\" data-end=\"3113\">muted discretionary spending<\/strong> and the <strong data-start=\"3122\" data-end=\"3172\">rising popularity of instant delivery services<\/strong>. Analysts believe that Eternal\u2019s overall profitability could remain under pressure as Blinkit\u2019s capital-heavy operations continue to scale.<\/p>\n<h3 data-start=\"3321\" data-end=\"3354\"><strong data-start=\"3325\" data-end=\"3354\">The GST 2.0 Ripple Effect<\/strong><\/h3>\n<p data-start=\"3356\" data-end=\"3657\">Eternal\u2019s management has also pointed to the challenges brought by <strong data-start=\"3423\" data-end=\"3434\">GST 2.0<\/strong>, under which <strong data-start=\"3448\" data-end=\"3475\">local delivery services<\/strong> attract an <strong data-start=\"3487\" data-end=\"3498\">18% GST<\/strong> when delivery partners are not GST-registered. The tax applies to <strong data-start=\"3565\" data-end=\"3603\">delivery fees charged to customers<\/strong>, impacting around <strong data-start=\"3622\" data-end=\"3654\">a quarter of Zomato\u2019s orders<\/strong>.<\/p>\n<p data-start=\"3659\" data-end=\"3866\">In its latest shareholder communication, <strong data-start=\"3700\" data-end=\"3721\">CFO Akshant Goyal<\/strong> noted that the company had decided to <strong data-start=\"3760\" data-end=\"3808\">pass on the additional tax cost to customers<\/strong>, which led to <strong data-start=\"3823\" data-end=\"3863\">a slight moderation in order volumes<\/strong>.<\/p>\n<h3 data-start=\"3873\" data-end=\"3916\"><strong data-start=\"3877\" data-end=\"3916\">A Broader Business Rebuild Underway<\/strong><\/h3>\n<p data-start=\"3918\" data-end=\"4287\">Despite regulatory headwinds, Eternal has been <strong data-start=\"3965\" data-end=\"3991\">reshaping its identity<\/strong> since rebranding from <strong data-start=\"4014\" data-end=\"4024\">Zomato<\/strong> in <strong data-start=\"4028\" data-end=\"4042\">March 2025<\/strong>. The company now operates across multiple verticals \u2014 <strong data-start=\"4097\" data-end=\"4163\">food delivery, quick commerce, restaurant supplies (Hyperpure)<\/strong>, and <strong data-start=\"4169\" data-end=\"4215\">events and ticketing (acquired from Paytm)<\/strong> \u2014 positioning itself as a <strong data-start=\"4242\" data-end=\"4284\">multi-ecosystem consumer tech platform<\/strong>.<\/p>\n<p data-start=\"4289\" data-end=\"4555\">While this diversification provides growth levers, it also adds operational complexity and compliance risks. The company\u2019s aggressive scaling of Blinkit has been both a <strong data-start=\"4458\" data-end=\"4495\">growth catalyst and a cost driver<\/strong>, making fiscal discipline crucial in the coming quarters.<\/p>\n<h3 data-start=\"4562\" data-end=\"4584\"><strong data-start=\"4566\" data-end=\"4584\">The Road Ahead<\/strong><\/h3>\n<p data-start=\"4586\" data-end=\"4927\">As Eternal navigates this latest GST dispute, the case underscores a broader trend: <strong data-start=\"4670\" data-end=\"4752\">India\u2019s digital-first startups are entering an era of heightened tax vigilance<\/strong>. With multiple state authorities tightening enforcement and evolving regulations, such as GST 2.0, maintaining compliance while scaling rapidly has become a fine balancing act.<\/p>\n<p data-start=\"4929\" data-end=\"5087\">For now, Eternal remains confident in contesting the demand \u2014 but the road to sustainable, compliant growth may test even the most seasoned Indian unicorns.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Adding to its growing list of tax troubles, Eternal \u2014 the parent company of Zomato and Blinkit \u2014 has been slapped with a \u20b9128.4 crore GST demand by the Uttar Pradesh State Tax Department. The order includes a tax demand of \u20b964.2 crore and an equivalent penalty of \u20b964.2 crore, covering the period between April [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":4961,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[293],"tags":[1620,3408,2948,3405,3416,3400,3409,3412,3403,3415,3406,3414,3410,3401,3411,1990,2753,3404,579,3413,3407,3402],"class_list":{"0":"post-4960","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-top-news","8":"tag-blinkit","9":"tag-blinkit-business-model","11":"tag-blinkit-revenue-growth","12":"tag-business-news-india","13":"tag-eternal","14":"tag-eternal-financial-results","15":"tag-eternal-fy26-results","16":"tag-eternal-gst-notice","17":"tag-eternal-tax-case","18":"tag-eternal-tax-dispute","19":"tag-food-delivery-business-india","20":"tag-gst-2-0-regulations","21":"tag-gst-demand","22":"tag-indian-startup-news","23":"tag-indian-startups","24":"tag-quick-commerce-india","25":"tag-uttar-pradesh-tax-authorities","26":"tag-zomato","27":"tag-zomato-blinkit-parent","28":"tag-zomato-news","29":"tag-zomato-parent-company"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.3 (Yoast SEO v27.5) - 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