Swiggy has been hit with a significant tax demand of over Rs 158 crore between April 2021 and March 2022. The assessment order, issued on Tuesday, cites alleged contraventions related to cancellation charges paid to merchants.
The firm, which is based in Bengaluru, has said that it will appeal the order, adducing that the demands are grounded on a misunderstanding of the applicable provisions. A spokesperson for Swiggy stated, “We firmly believe that our practices comply with the relevant tax regulations, and we will pursue all available legal avenues to contest this order.”
The tax authorities say Swiggy should have accounted for the cancellation fees as part of its taxable income, which the company opposes. This happens when the food delivery industry faces regulatory attention regarding its charges and service fees.
Swiggy’s move to contest the demand aligns with its strategy to maintain operational continuity while resolving legal disputes. The company’s stance highlights the complexities surrounding tax compliance in the rapidly evolving digital economy.
Experts suggest that the case could set a precedent for how cancellation fees are treated under the tax regime. As the legal process unfolds, industry stakeholders closely monitor the case, aware that its outcome could influence how other players in the sector structure their fee policies going forward.
Also Read: MIRA Money: Curated Investment Portfolios with 28.3% Returns!
