Eternal, headed by Deepinder Goyal, confronted with a substantial GST liability exceeding Rs 40 crore; learn about their upcoming strategies

In a recent development, Eternal Limited, the parent company of popular food delivery platform Zomato, has received three demand orders from the Goods and Services Tax (GST) department totalling over Rs 40 crore. The Income Tax Department also issued a tax demand of over Rs 40 crore to Eternal Limited.

The GST demands include Rs 2.29 crore for short payment of output tax between July 2017 and March 2018, Rs 27.94 crore for excess input tax credit claimed in FY2018-19, and Rs 11.09 crore for excess input tax credit claimed in FY2019-20. The demands cover the period between July 2017 and March 2020. Eternal Limited believes these orders are without merit and intends to appeal them.

The Income Tax Department's demand includes tax, interest, and penalties, amounting to a total of over Rs 40 crore for the financial year 2021-22, adding another financial burden to the company. Eternal Limited has also received a new tax demand and penalty of Rs 1.34 crore for the same year.

Despite these financial challenges, Eternal Limited has shown commitment to its new ventures. The company has invested Rs 150 crore towards Bistro, its AI-native customer support platform Nugget, and its Greening India initiative. Bistro, Eternal's 10-minute food delivery service, now operates 38 kitchens in Delhi NCR and Bengaluru.

In the first quarter of FY26, Blinkit, a quick commerce arm of Eternal, overtook Zomato in revenue, posting Rs 2,400 crore, while Zomato recorded Rs 2,261 crore in revenue during the same period. However, Eternal reported a significant decline in profitability in the first quarter of FY26, with consolidated net profit falling 90% to Rs 25 crore.

This financial turmoil comes at a time when Eternal is expanding its business into new verticals. The company is investing heavily in Bistro, its 10-minute food delivery service, aiming to compete with other players in the market.

As Eternal Limited navigates through these financial challenges, it remains to be seen how it will address the tax demands and continue its growth trajectory in the competitive market.