StartupTalky

Tag: Demand Notice

  • Blackbuck Hit with INR 28.56 Lakh Tax Demand for FY18, Set to Appeal

    On July 8, listed logistics startup BlackBuck announced that the Income Tax (IT) Department has sent it a tax demand notice for INR 28.55 Lakh. The company stated in a statement with the exchanges that the July 7 tax notice was sent because certain expenses that qualified for tax deducted at source (TDS) had not been taxed.

    The company claims that the tax demand, which included taxes, was made by the Bengaluru office of the Assistant Commissioner of Income Tax (TDS) and related to the fiscal year 2017–18 (FY18).

    In explaining the nature of the infractions, BlackBuck said that an order under Sections 201(1) and 201(1A) of the Income-tax Act, 1961, was issued because some expenses did not have tax deducted at the source, confirming the total demand payment of INR 28,55,872/-, including applicable interest.

    BlackBuck Plans to Appeal the Order

    According to BlackBuck, it has a “strong case on merits,” and the business intends to appeal the notification to the relevant authority.

    The logistics firm added that there would be “no material implications” for the business from the IT department’s order.

    BlackBuck, which was founded in 2015 by Rajesh Yabaji, Chanakya Hridaya, and Ramasubramaniam B, began as an online truck aggregator before growing to include a wide variety of load management, telemetry, payment, and vehicle financing products.

    It links small and large companies with shipping needs with truck fleet operators. Additionally, the organisation provides fuel cards and FASTag payments, GPS tracking and truck theft protection systems, certified communication channels between the shipper and the trucker, and vehicle financing options.

    BlackBuck Financial Outlook

    The logistics company’s fourth quarter (Q4) of the fiscal year 2024–25 (FY25) had a consolidated net profit of INR 280.1 Cr, compared to a net loss of INR 90.8 Cr in the same period last year.

    A tax credit of INR 245 Cr during the reviewed quarter was the reason for the strong, profitable results. Operating revenues, on the other hand, increased by 30.6% to INR 121.8 Cr in Q4 FY25 from INR 93.2 Cr in the same period the previous year.

    BlackBuck Subsidiary Gears Up for Digital Payments with RBI’s PPI Nod

    The Reserve Bank of India (RBI) has granted a prepaid payment instruments (PPI) licence to Zinka Logistics, a subsidiary of listed logistics giant BlackBuck.

    The business stated in an exchange statement that its fully owned subsidiary, TZF Logistics Solutions Pvt Ltd, was awarded the licence by the central bank. Banks and non-banks cannot issue PPIs without a licence under the Payment and Settlement Systems Act of 2007.

    To put it in perspective, PPIs enable remittance facilities, conduct financial activities, assist the purchase of goods and services, and more, all of which are facilitated by the value they store.

    According to BlackBuck’s petition, the licence will assist the company’s fully owned subsidiary TZF Logistics Solutions Pvt Ltd, in setting up and running a payment system for prepaid payment instruments.

  • Income Tax Department Issues INR 158 Cr Demand Notice to Swiggy

    The Income Tax (I-T) Department has issued a tax demand notice to foodtech giant Swiggy, requesting payment of an additional INR 158.25 Cr. According to Swiggy’s exchange filing, the company is accused of improperly taking deductions for “cancellation charges paid to merchants”. The violations include firstly, Section 37 of the Income Tax Act of 1961 prohibits cancellation charges paid to merchants. Secondly, the submission stated that interest income on the income tax refund had not been given for taxation. The supplementary demand notice, which was issued by the Central Circle of the IT department’s Bangalore office, covers the time frame of April 2021–March 2022. Swiggy stated that it is taking the required actions to safeguard its interests in the interim. Swiggy said it is pursuing the required actions to safeguard its interests through review and appeal since it feels it has compelling reasons against the order. Additionally, the foodtech company thinks that its “financials and operations” won’t be significantly impacted by the demand notice.

    Another Day at the Office for Swiggy

    The business has previously been served with tax notices. Just one week ago, the Income Tax Department office in TDS Circle, Bengaluru, sent Swiggy an income tax demand notice for INR 99 lakh for the April 2017–March 2018 period. A demand notice for INR 326.7 Cr was also issued by the GST department in 2023 to the Sriharsha Majety-led business for the July 2020–March 2022 period. The business has challenged the notice in an appeal. Zomato, Swiggy’s competitor, has also received a barrage of tax letters. An INR 401.70 Cr GST demand letter and an interest penalty of the same amount were sent to the Deepinder Goyal-led company in December of last year.

    Trouble Continues for Swiggy

    Swiggy has been attempting to fizz off fires on several fronts, and this is the latest blow from the tax authorities. The company’s bottom line has suffered due to excessive capital burn and fierce competition in the rapid commerce sector. In Q3 FY25, Swiggy’s net loss increased 39% to INR 799 Cr from INR 574.4 Cr in the same quarter last year. From INR 3,048.6 Cr in Q3 FY24 to INR 3,993.1 Cr in the reviewed quarter, operating revenue increased by 31%. The company’s shares have been declining due to growing losses and heightened competition. Year-to-date (YTD), the stock has dropped by almost 38%. BofA Securities downgraded Zomato and Swiggy this week, pointing to significant losses in rapid commerce and slower growth in their meal delivery business. The broking firm lowered Swiggy’s price target from INR 420 per share to INR 325 and downgraded its recommendation from “Buy” to “Underperform”.

  • Notice to Ola Electric For Not Fulfilling PLI Commitments

    To make matters worse, Ola Electric Mobility has apparently received a notice from the Ministry of Heavy Industries (MHI) for not fulfilling its obligations under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage PLI program. In addition to Ola, the notifications were also sent to Reliance and Rajesh Exports, two other businesses that benefitted from the battery PLI scheme. Ola Electric would be penalised INR 12.5 lakh per day beginning January 1, 2025, until it fulfils its obligations under the PLI scheme, according to a media report. ACC Energy Storage, which bid as Rajesh Exports, and Reliance New Energy Limited (RNEL), owned by Mukesh Ambani, will pay INR 5 lakh every day.

    Response from Ola Electric

    A representative for Ola Electric responded to the notice by saying that its purpose is to encourage businesses to meet the PLI program’s battery manufacturing goals as soon as possible. According to a senior official quoted in a media report, “The scheme’s goal is not to collect penalties.” The official did add, though, that the businesses are free to argue their case and request a waiver of this rule. Ola Electric has previously declared that it will start producing its cells commercially in Q1 of FY26, and the company is on track to satisfy the deadlines. Under the government’s ACC PLI program, Ola Electric will be the first company in India to produce lithium-ion cells on a commercial basis.

    What is PLI Scheme?

    With an INR 18,100 Cr budgeted investment, the PLI Scheme seeks to increase indigenous battery manufacturing capacity and lessen dependency on imports. In addition to the incentives, the MHI offered the companies capacities through the PLI Program. Ola Electric agreed to produce advanced chemistry cells for EVs under the ACC PLI project in 2022. The plan prioritises indigenous value addition and global competitiveness in battery manufacture, with a goal manufacturing capacity of 50 GWh. It is important to remember that Ola Electric has benefitted from other government programs like PM E-Drive and FAME-II, which mandate that businesses maintain service centres and offer warranties.

    Trouble Continues for Ola Electric

    In addition to the aforementioned incident, a media outlet also reported that Ola Electric’s Roadster X is still delaying delivery due to unresolved technical concerns and the ongoing homologation process. Bhavish Aggarwal stated at the bike introduction that the initial plan was for the bike series to start by mid-March 2025. This comes shortly after MHI began to investigate the business for service-related problems, including multiple customer complaints about delayed deliveries, faulty cars, and subpar customer support.

  • Foodtech Giant Zomato Gets Yet Another Demand Notice

    Zomato, a food-tech giant, has received a tax demand and penalty order totaling over INR 3.5 lakh, adding to the flood of goods and services tax (GST) warnings it has already been receiving.

    On August 31st, Zomato announced in an exchange filing that the Sales Tax Officer of Delhi’s Ward 300 had issued an adjudication order, increasing the GST demand to INR 1.89 Lakh plus interest of INR 1.59 Lakh and any applicable penalty, the amount of which was not specified. The company headed by Deepinder Goyal claimed that it received the GST notification “disputing the eligibility of the input tax credit and interest penalty thereon.”

    The filing indicated that the GST demand notice was issued for the period beginning in April 2019 and ending in March 2020.              

    The Second Notice in a Week

    Zomato has been hit with a demand and penalty order for the Goods and Services Tax (GST) for the second time this week. GST notices for around INR 4.59 crore were received by the company on 29 August 2024 from the authorities in Tamil Nadu and West Bengal. Zomato has stated that it intends to proceed with an appeal against the most recent tax demand order, even though it previously stated that it would file an appeal against the previous tax demand orders before the applicable judicial body.

    The company stated in response to the most recent demand notice that “despite the fact that the company believes that it has a strong case on merits, the company shall pay the applicable amounts to the GST authorities.” This was in reference to the amount involved and the cost of litigation.

    Zomato is now dealing with several tax concerns, which is an important fact to keep in mind. An INR 9.45 crore GST notice was sent to the food-tech major by the Assistant Commissioner of Commercial Taxes (Audit) in Karnataka. This notice was received by the company as of the previous month.

    The Gurugram Goods and Services Tax (GST) authority issued a tax demand and penalty notice for INR 11.8 crore to the food delivery company in April, before that. These changes take place at a time when Zomato’s stock is increasing as a result of the company’s growing financial performance. The company’s net profit went from INR 2 crore in the previous year’s quarter to INR 253 crore in the first quarter of FY25. The value of Zomato’s stock has increased by about 102% so far this year.

    For $244 Million, Zomato Purchased Out Paytm’s Entertainment Ticketing Division
    Zomato is going to buy out Paytm’s movie and ticketing division. The deal has been in the works between the two businesses for three months now.
    StartupTalkyNitin Konde