Rs 158 Crore Tax Demand Issued To Swiggy; Firm Plans To Challenge The Order

The company expressed confidence in its position, stating that it has strong grounds to challenge the order and is taking appropriate steps to safeguard its interests through a review or appeal

The order was issued by the Deputy Commissioner of Income Tax, Central Circle 1 (1), Bangalore

Source : Swiggy

Food and grocery delivery platform Swiggy announced on Tuesday that it has received an assessment order from the Income Tax Department, demanding an additional tax of over Rs 158 crore for the fiscal year spanning April 2021 to March 2022. The order was issued by the Deputy Commissioner of Income Tax, Central Circle 1 (1), Bangalore.

According to Swiggy, the assessment relates to alleged violations, including the disallowance of cancellation charges paid to merchants under Section 37 of the Income-tax Act, 1961, and the failure to offer interest income on income tax refunds for taxation.

The Income Tax Department also alleged that the company failed to pay taxes on the interest income earned from its income tax refund (ITR).

Swiggy's Statement

In a regulatory filing, Swiggy stated, "The Company has received an assessment order for the period April 2021 to March 2022 where an addition of Rs 158,25,80,987 (one hundred and fifty-eight crores twenty five lakhs, eighty thousand nine hundred and eighty seven, only) has been made.”

The company expressed confidence in its position, stating that it has strong grounds to challenge the order and is taking appropriate steps to safeguard its interests through a review or appeal.

It also noted that the assessment order is not expected to have any significant adverse impact on its financial performance or day-to-day operations.

This is not the first time the Bengaluru-based food-tech company has come under tax scrutiny. As per the reports, Swiggy has faced similar challenges in the past. Recently, the Income Tax Department’s TDS Circle in Bengaluru issued a demand notice for Rs 99 lakh concerning the period from April 2017 to March 2018. Additionally, the Goods and Services Tax (GST) department has demanded a payment of Rs 326.7 crore from Swiggy for the period between July 2020 and March 2022. The company had already filed an appeal against this demand in 2023.