Eternal, the parent company of popular consumer internet platforms Zomato and Blinkit, has received two Goods and Services Tax (GST) demand orders amounting to more than ₹27.56 crore from the West Bengal tax authorities. The demands include tax, interest, and penalties, and relate to the alleged short payment of output tax for the period between April 2020 and March 2022.
The development adds to the growing regulatory and compliance scrutiny faced by large digital and consumer-tech companies operating across multiple states in India’s complex GST framework. Eternal has, however, expressed confidence in its legal position and announced plans to challenge the orders through the appellate route.
Credits: The Free Press Journal
Breakup of the Tax Demand
According to a regulatory filing made by the company, the orders were issued by the Additional Commissioner of State Tax (Appeals), West Bengal, and were received on January 8, 2026. The total GST demand confirmed stands at ₹16.72 crore, while the interest component amounts to ₹9.16 crore. In addition, a penalty of ₹1.67 crore has been imposed, taking the total financial exposure to over ₹27.56 crore.
The alleged liability pertains specifically to output tax payments during the two-year period that coincided with the peak of the COVID-19 pandemic, a time when online food delivery and quick commerce platforms saw rapid growth and evolving business models.
Company Maintains Strong Legal Stand
Eternal has made it clear that it does not agree with the findings of the tax authorities. In its disclosure, the company said it believes it has a “strong case on merits” and that its position is supported by opinions obtained from external legal and tax advisors.
The company also clarified that it will be filing an appeal before the appropriate authority, signalling that it intends to contest both the tax demand and the associated interest and penalty. Such appeals are common in GST-related disputes, especially where interpretations of tax liability and classification of transactions are involved.
Context: Complex GST Landscape for Digital Platforms
India’s GST regime, while designed to simplify indirect taxation, has posed interpretation challenges for companies operating pan-India digital platforms. Issues such as place of supply, classification of services, valuation, and attribution of revenue across states have frequently led to disputes between businesses and state tax authorities.
For platforms like Zomato and Blinkit, which operate asset-light models but facilitate transactions across multiple jurisdictions, compliance often involves navigating varying interpretations at the state level. Industry experts note that disputes related to output tax shortfalls are not uncommon, especially in the early years of GST implementation.
Financial Impact Likely to Be Limited
While the demand amount is sizeable in absolute terms, analysts believe the financial impact on Eternal is unlikely to be material in the near term, given the company’s scale of operations. Regulatory filings typically indicate such matters as contingent liabilities until a final judicial outcome is reached.
Moreover, the appeal process under GST law can take several years to conclude, during which companies often receive partial or complete relief depending on the strength of their legal arguments and judicial precedents.
Credits: ABP Live
What Lies Ahead
Eternal’s decision to challenge the GST orders reflects a broader trend of large corporates opting to seek judicial clarity on tax matters rather than settling disputed demands. The outcome of the appeal could have implications not just for Eternal, but also for other consumer internet companies facing similar questions around GST compliance.
As the case progresses through the appellate system, investors and industry watchers will closely track developments for any signals on how tax authorities and courts are interpreting GST obligations for digital-first businesses. For now, Eternal remains confident that its legal position will stand scrutiny, even as it continues to focus on scaling its food delivery and quick commerce operations across India.
