Swiggy faces tax demands worth over Rs 165 crore, says no major financial impact

The total tax demand stands at over Rs 165 crore. In a regulatory filing on Saturday, Swiggy said it received an order from the Office of the Profession Tax Officer in Pune, demanding Rs 7.59 crore.

New Delhi: Online food and grocery delivery platform Swiggy is facing fresh tax troubles after receiving two assessment orders related to the financial year 2021-22.

The total tax demand stands at over Rs 165 crore. In a regulatory filing on Saturday, Swiggy said it received an order from the Office of the Profession Tax Officer in Pune, demanding Rs 7.59 crore.

---

The order alleges that the company failed to properly deduct profession tax from employees’ salaries, which is required under the Maharashtra State Tax on Professions, Trades, Callings & Employments Act, 1975.

Swiggy, however, maintained that it has strong grounds to challenge the order and is planning to file a review or appeal. “The Company believes that it has strong arguments against the Order and is taking necessary steps to protect its interest through review/appeal,” Swiggy stated in its filing.

The company also clarified that the issue will not have a significant impact on its finances or operations. This development comes just days after Swiggy was served another assessment order by the Deputy Commissioner of Income Tax, Central Circle 1(1), Bangalore. This order demands an additional tax of over Rs 158 crore, also for the April 2021 to March 2022 period.

The larger tax demand is linked to issues such as cancellation charges paid to merchants, which the authorities have disallowed under Section 37 of the Income-tax Act, 1961. It also includes interest income from income tax refunds, which the authorities claim was not properly declared.

“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 said in a regulatory filing.

Swiggy said it is confident in its legal position and is taking necessary steps to appeal the tax order. Just like in the profession tax matter, the company said this order too will not cause any major adverse effect on its financials or day-to-day operations.