Pune: Swiggy, the prominent online food and grocery delivery service, is currently embroiled in tax-related disputes for the financial year 2021-22. The company has disclosed that it has received two tax assessment notices, totaling over Rs 165 crore in demands.
One of these notices, issued by the Profession Tax Officer in Pune, includes a penalty of Rs 7.59 crore. The tax authorities allege that Swiggy failed to properly deduct profession tax from its employees’ salaries, in violation of the Maharashtra State Tax on Professions, Trades, Callings & Employments Act, 1975.
Swiggy has contested these claims, asserting that it has strong legal grounds to challenge the order. The company plans to file a review or appeal in due course. “The company believes it has a robust defense and is taking the necessary steps to protect its interests through the review or appeal process,” Swiggy stated. It further assured stakeholders that this issue would not significantly affect its financial position or business operations.
In addition to the profession tax issue, Swiggy has also received an assessment notice from the Deputy Commissioner of Income Tax, Central Circle 1(1) in Bangalore. This notice demands an additional Rs 158 crore for the same fiscal year. The dispute relates to cancellation charges paid to merchants, which the tax authorities argue should not have been accounted for under Section 37 of the Income-tax Act, 1961. The notice also raises concerns about interest income from tax refunds, which was allegedly not reported correctly.
Swiggy has responded by acknowledging the Rs 158.25 crore addition in the assessment order for the period between April 2021 and March 2022. Despite the significant tax demands, Swiggy is confident in its legal stance and is preparing to challenge the assessments. The company reassured that these tax issues will not have a major impact on its financial stability or day-to-day operations.
