Zomato Parent Eternal Faces ₹9.63 Crore GST Demand from Andhra Pradesh Authorities

Eternal Ltd, the parent company of Zomato, has received a GST demand notice from Andhra Pradesh tax authorities. While the company plans to challenge the order, it remains confident about its legal position and expects no financial impact.

GST Demand Notice Issued to Eternal Ltd

Eternal Ltd has been served a Goods and Services Tax (GST) demand order by the Andhra Pradesh tax department for the financial year 2023–24. The order was issued by the Deputy Commissioner (State Tax), State Special Circle-I, highlighting alleged discrepancies in the company’s tax payments during the assessment period.

As per the official disclosure, the demand pertains to the period between April 2023 and March 2024. Authorities have concluded that there was a shortfall in the payment of output GST, leading to additional liabilities.

Breakdown of Tax Liability

The total tax demand raised against Eternal Ltd stands at approximately ₹9.63 crore. This includes:

• ₹6.49 crore towards the principal GST liability
• ₹2.50 crore as interest on the alleged shortfall
• ₹64.87 lakh as penalty imposed by the authorities

The tax department claims that the company underpaid its output tax during the financial year, triggering this cumulative demand along with interest and penalties.

Company’s Response and Legal Position

Eternal Ltd has acknowledged receipt of the order and stated that it is currently evaluating appropriate legal options to challenge the demand. The company has emphasized that it believes it has a strong case on merits and is confident about defending its position.

In its regulatory filing, the company clarified that it does not expect any material financial impact arising from the tax demand. This suggests that Eternal may either contest the order legally or seek relief through appellate mechanisms available under GST laws.

The company’s stance reflects its confidence in its tax compliance processes and interpretation of applicable regulations.

Financial Performance: Strong Quarterly Growth

Despite the tax-related development, Eternal Ltd has reported robust financial performance for the January–March quarter of FY26.

The company’s profit after tax (PAT) surged significantly by 346.15% year-on-year, reaching ₹174 crore compared to ₹39 crore in the same quarter of the previous year. This sharp rise indicates strong operational efficiency and improved business performance during the quarter.

Additionally, revenue from operations witnessed a substantial increase of 196.4% year-on-year, climbing to ₹17,292 crore in Q4 FY26 from ₹5,833 crore a year earlier. This growth highlights the company’s expanding market presence and rising consumer demand across its business verticals.

Annual Performance Shows Mixed Trends

While quarterly numbers were impressive, Eternal’s full-year financial performance painted a mixed picture.

For the financial year FY26, the company reported a PAT of ₹366 crore, which is lower than the ₹527 crore recorded in FY25. This decline suggests that despite strong quarterly momentum, certain challenges impacted overall annual profitability.

On the revenue front, however, the company maintained strong growth. Total revenue for FY26 rose to ₹54,364 crore, reflecting continued expansion and scaling of operations across segments.

Segment-Wise Business Performance

Eternal Ltd operates across multiple business segments, each contributing differently to overall growth:

Food Delivery Business

The core food delivery segment continued to grow steadily. Quarterly revenue increased by 33.2% year-on-year to ₹2,737 crore, up from ₹2,054 crore in Q4 FY25. For the full fiscal year, this segment generated revenue of ₹10,159 crore, indicating stable demand and consistent performance.

Quick Commerce: Blinkit Leads Growth

Quick commerce platform Blinkit emerged as the primary growth driver for the company. The segment reported an exceptional 674.2% year-on-year growth in Q4 revenue, reaching ₹13,232 crore.

On an annual basis, Blinkit’s revenue surged 625.6% to ₹37,779 crore. This exponential growth highlights the increasing popularity of ultra-fast delivery services and the company’s strong positioning in this segment.

Going-Out Business (District)

The company’s “going-out” vertical, District, also showed moderate growth. Revenue for Q4 FY26 stood at ₹277 crore, compared to ₹229 crore in the same period last year. This reflects a gradual recovery and rising consumer spending in lifestyle and dining experiences.

B2B Platform: Hyperpure Declines

In contrast, the B2B supplies platform Hyperpure faced challenges. The segment reported a 46.8% year-on-year decline in Q4 revenue, which fell to ₹978 crore. This drop suggests demand fluctuations or operational hurdles within the B2B supply chain business.

Strategic Outlook and Implications

The GST demand notice comes at a time when Eternal Ltd is aggressively expanding its business and strengthening its presence across multiple verticals. While the tax dispute may create short-term regulatory concerns, the company’s confidence in its legal position reduces the likelihood of significant financial strain.

At the same time, the company’s strong growth in quick commerce and improving performance in core segments signal a positive long-term outlook. The rapid expansion of Blinkit, in particular, underscores the company’s focus on capturing emerging consumer trends in instant delivery services.

Conclusion

Eternal Ltd’s receipt of a ₹9.63 crore GST demand highlights ongoing regulatory scrutiny faced by large digital platforms. However, the company’s assurance of a strong legal case and minimal financial impact suggests that the issue may not significantly disrupt its operations.

With robust quarterly growth, expanding revenue streams, and strong momentum in quick commerce, Eternal continues to position itself as a major player in India’s evolving digital and consumer services ecosystem.