Fresh regulatory heat on India’s quick commerce leader: Eternal Consumer Brands, the driving force behind Zomato and Blinkit, has been served a Rs 3.7 crore GST show-cause notice. This move by tax authorities intensifies focus on revenue recognition practices in the hyper-competitive online delivery arena.
Breaking down the notice, it pertains to alleged under-reporting of GST on select transactions, prompting Eternal to mount a defense. As Zomato’s Blinkit arm scales nationwide with lightning-fast fulfillments, questions around tax efficiency in high-velocity supply chains take center stage.
The company wasted no time in addressing the elephant in the room. ‘We have received the notice and are engaging with experts for a detailed response,’ Eternal communicated. This comes against a backdrop of heightened GST vigilance post-pandemic, targeting digital intermediaries.
Strategically, Blinkit represents Zomato’s bold bet on everyday essentials, rivaling heavyweights like Swiggy Instamart. Yet, the model’s intricacies—from supplier invoicing to rider payouts—invite scrutiny. A prolonged tussle could divert resources from expansion plans.
Equity markets shrugged off the news with minor dips, buoyed by Zomato’s underlying momentum. Peers in quick commerce may brace for copycat audits, spurring sector-wide compliance overhauls.
Zooming out, this episode illuminates the tightrope walk between blistering growth and regulatory adherence. With Rs 3.7 crore at stake, Eternal’s navigation will shape narratives on fiscal responsibility in new-age retail. Expect appeals, hearings, and perhaps a precedent-setting verdict ahead.