Swiggy Receives Dual Tax Demands Worth Over Rs 165 Crore, Here’s What The Firm Said

Online food and grocery delivery platform Swiggy is grappling with fresh tax-related challenges as it faces two separate assessment orders for the financial year 2021–22, amounting to a cumulative tax demand of more than Rs 165 crore. The company disclosed these developments in a regulatory filing made on Saturday.

The first order, issued by the Profession Tax Officer in Pune, claimed Swiggy failed to accurately deduct professional tax from its employees’ salaries, a requirement under the Maharashtra State Tax on Professions, Trades, Callings & Employments Act, 1975. The alleged shortfall amounts to Rs 7.59 crore, reported IANS.

In response, Swiggy emphasised that it has a robust case to challenge the notice. “The Company believes that it has strong arguments against the Order and is taking necessary steps to protect its interest through review/appeal,” it said. Swiggy also assured stakeholders that this issue is unlikely to have a material impact on its business or financial health.

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Major Income Tax Demand In Karnataka

In a separate case, the Deputy Commissioner of Income Tax, Central Circle 1(1), Bangalore, issued a far larger assessment order demanding Rs 158.25 crore for the same financial year. This order relates to multiple disputed items, including cancellation charges paid to merchants, which have been disallowed as deductions under Section 37 of the Income-tax Act, 1961.

Additionally, the authorities have taken issue with the way Swiggy reported interest earned on income tax refunds, alleging that the income was not properly disclosed.

“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 noted in its filing.

Once again, Swiggy  expressed confidence in its legal standing. It plans to contest the order and is preparing to initiate an appeal process. The company reiterated that this tax notice, like the one from Pune, will not significantly disrupt its operations or financials.

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