Swiggy Gets ₹7.59 Crore Tax Demand Order: A Blow to the Food Delivery Giant
Swiggy, one of India’s leading food delivery companies, has received a tax demand order worth ₹7.59 crore from the Office of the Profession Tax Officer in Pune. The assessment order, passed for the period of April 2021 to March 2022, relates to alleged violations of provisions pertaining to deduction of profession tax from the employees’ salary.
This development comes as a significant blow to Swiggy, which has been expanding its operations rapidly across the country. The company has been facing intense competition in the food delivery market, and this tax demand order could further strain its financial resources.
According to the assessment order, Swiggy has been accused of failing to deduct profession tax from the salaries of its employees, as required by law. The tax authority has demanded a total amount of ₹7.59 crore, which includes interest and penalty, from the company.
This is not the first time that Swiggy has faced a tax-related issue. In the past, the company has been scrutinized by the tax authorities for allegedly misclassifying its employees as freelancers, thereby avoiding tax deductions. However, this latest assessment order is specific to the alleged non-deduction of profession tax from the salaries of Swiggy’s employees.
The profession tax is a state-level tax levied on individuals employed in certain professions, including those in the service sector. The tax authorities have been cracking down on employers who fail to deduct and deposit profession tax from their employees’ salaries.
Swiggy’s response to the tax demand order is still awaited. However, the company has been facing intense pressure from its employees, who have been demanding better working conditions and benefits. The tax demand order could further exacerbate the situation, as employees may become more vocal about their demands.
In recent years, Swiggy has been expanding its operations rapidly, with a focus on increasing its market share in the food delivery market. The company has been investing heavily in technology and marketing, and has also been expanding its offerings to include new categories such as grocery delivery and meal kits.
However, the company’s rapid expansion has also led to concerns about its financial sustainability. Swiggy has been facing intense competition from other food delivery companies such as Zomato and Uber Eats, and its financial performance has been under scrutiny.
In its latest financial report, Swiggy reported a net loss of ₹3,745 crore for the fiscal year 2021-22. The company’s revenue grew by 47% year-on-year to ₹6,695 crore, but its losses increased due to increased expenses and investments.
The tax demand order from the Office of the Profession Tax Officer in Pune is a significant development for Swiggy, and could have a material impact on its financial performance. The company will need to respond quickly to the assessment order and take steps to address the concerns raised by the tax authorities.
In conclusion, Swiggy’s receipt of a tax demand order worth ₹7.59 crore is a significant development in the company’s financial journey. The assessment order relates to alleged violations of provisions pertaining to deduction of profession tax from the employees’ salary, and could have a material impact on the company’s financial performance.
As Swiggy navigates this challenging situation, it will be important for the company to focus on complying with tax laws and regulations, and to take steps to address the concerns raised by the tax authorities. The company’s ability to respond effectively to this tax demand order will be critical to its future growth and success.
Source: https://www.ndtvprofit.com/amp/business/swiggy-gets-rs-759-crore-tax-demand-order
