Swiggy confronts tax demands exceeding Rs 165 crore, claims minimal financial impact
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Synopsis
New Delhi, April 6 (NationPress) Swiggy is currently dealing with tax issues after receiving two assessment orders for the 2021-22 fiscal year, amounting to over Rs 165 crore. The company insists that these demands will not significantly affect its financial stability.
Key Takeaways
- Swiggy received two tax assessment orders for FY 2021-22.
- Total demand exceeds Rs 165 crore.
- Company believes it can successfully challenge the orders.
- No major impact on financials or operations anticipated.
- Swiggy plans an appeal against the tax demands.
New Delhi, April 6 (NationPress) The online platform for food and grocery delivery, Swiggy, is encountering new tax challenges after receiving two assessment orders pertaining to the fiscal year 2021-22.
The cumulative tax demand exceeds Rs 165 crore. In a regulatory announcement made on Saturday, Swiggy disclosed that it has been issued an order by the Office of the Profession Tax Officer in Pune, which requests Rs 7.59 crore.
This order claims that the company did not adequately deduct profession tax from employees' salaries, as mandated by the Maharashtra State Tax on Professions, Trades, Callings & Employments Act, 1975.
Nevertheless, Swiggy asserted that it possesses substantial grounds to contest the order and intends to initiate a review or appeal process.
"The Company believes that it has robust arguments against the Order and is taking necessary steps to safeguard its interests through review/appeal," Swiggy mentioned in its regulatory filing.
Additionally, the company stressed that this matter will not generate a significant impact on its financials or operations.
This occurrence follows shortly after Swiggy was issued another assessment order by the Deputy Commissioner of Income Tax, Central Circle 1(1), Bangalore.
This particular order demands an extra tax of over Rs 158 crore, also covering the period from April 2021 to March 2022.
The larger tax demand is associated with matters such as cancellation fees paid to merchants, which authorities have ruled out under Section 37 of the Income-tax Act, 1961.
It also encompasses interest income from income tax refunds, which the authorities argue were not properly reported.
"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," Swiggy stated in a regulatory filing.
Swiggy expressed confidence in its legal stance and is taking vital actions to contest the tax order. Similar to the profession tax issue, the company emphasized that this order will not have any major detrimental effects on its financial status or daily operations.
