Zomato Parent Eternal Faces ₹40 Crore GST Tax Demand from Bengaluru Authorities
Eternal, parent of Zomato and Blinkit, faces a ₹40 crore GST tax demand. Company plans to appeal, citing strong legal grounds.
India’s food-tech sector has come under sharp regulatory focus once again. Eternal, the parent company of Zomato and Blinkit, has received three separate GST tax demand orders from Bengaluru authorities. Together, these orders demand over ₹40 crore for the period between July 2017 and March 2020.
The total figure includes ₹17.19 crore in GST dues, ₹21.42 crore in interest, and a penalty of ₹1.71 crore. The authorities issued the orders on August 25, 2025, after detailed scrutiny of Eternal’s tax filings.
Details of the Demand
Officials from the office of the Joint Commissioner of Appeals-4, Bengaluru, confirmed the orders after a multi-year review of GST compliance. According to the tax department, Eternal underreported or misclassified certain transactions during the early GST regime.
By clubbing tax, penalty, and interest, the final demand adds up to more than ₹40 crore. This action highlights the ongoing push by authorities to bring stricter enforcement in India’s digital and e-commerce sectors.
Eternal’s Business Footprint
Eternal is not only the holding company of Zomato and Blinkit but also operates District and Hyperpure, making it one of India’s most diversified digital-first enterprises.
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Zomato leads India’s online food delivery market with millions of daily orders.
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Blinkit, its quick-commerce arm, delivers groceries and essentials in minutes.
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Hyperpure supplies fresh ingredients to restaurants.
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District expands the company’s portfolio in hospitality and retail.
Given the scale of these operations, the Zomato GST tax demand carries serious implications not just for the company, but also for the broader ecosystem of suppliers, partners, and investors connected to these businesses.
Eternal Pushes Back
Despite the steep demand, Eternal remains confident. The company quickly announced its decision to appeal the orders.
In a regulatory filing, Eternal stated:
“We believe we have a strong case on merits, backed by legal counsel. We will file appeals before the appropriate authority.”
The company also emphasized that the demand does not reflect an immediate cash outflow since the appeals process will take time. This move reassures investors who may worry about the financial hit.
Growing Scrutiny of Digital Firms
India’s GST framework, introduced in 2017, continues to challenge both businesses and tax authorities. For large tech-driven firms like Zomato and Blinkit, tracking compliance across thousands of vendors and millions of transactions remains complex.
Authorities have, therefore, increased scrutiny of companies in food delivery, e-commerce, and digital payments. The Zomato GST tax demand signals a broader trend of regulators revisiting earlier filings to ensure accuracy and recover dues.
Moreover, this is not an isolated case. Several high-growth digital firms have faced retrospective tax demands over the last few years, creating uncertainty in the sector.
Potential Financial Impact
While ₹40 crore may not cripple Eternal, it adds pressure at a time when the company is balancing expansion and profitability. Zomato recently announced positive earnings, while Blinkit continues to burn cash in its quest for market leadership.
If Eternal fails to overturn the demand, it could affect cash reserves, investor sentiment, and even stock performance. Market analysts argue that clarity on such tax matters remains critical for long-term growth.
Legal Battle Ahead
Eternal’s appeals could take months, or even years, before a final verdict. Meanwhile, the company will need to disclose the contingent liability in its financials, keeping investors updated about the progress.
Legal experts suggest that Eternal has valid grounds for its case. However, the final decision will depend on how appellate authorities interpret GST provisions applied during the early years of its rollout.
Conclusion
The Zomato GST tax demand places Eternal at the center of a high-stakes regulatory battle. With over ₹40 crore at stake, the outcome will shape investor confidence and set an example for how tax authorities handle compliance issues in India’s booming digital economy.
As Eternal prepares for a lengthy appeals process, the case underscores the growing challenges for companies operating in fast-evolving sectors like food-tech and quick commerce.
