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Eternal Limited, the parent company of Zomato, has been served with three orders by the Goods and Services Tax (GST) department, raising a demand of more than INR 40 Cr. The orders, issued by the Joint Commissioner (Appeals)-4, Bengaluru, cover the period between July 2017 and March 2020.

According to the company’s regulatory filing, the confirmed demand comprises INR 2.29 Cr (GST, interest, and penalty) regarding short payment of output tax for the period between July 2017 and March 2018, INR 27.94 Cr covering excess input tax credit claimed in 2018-19, and INR 11.09 Cr on similar grounds for 2019-20.

“We believe that we have a strong case on the merits and backed by view from lawyers, and do not expect any financial impact on the company,” said Eternal.

Additionally, the company will also be filing appeals against the orders before the appropriate authority.

Notably, this is Eternal’s second GST disclosure for the month. Earlier in August, Eternal received a tax demand and penalty order of INR 1.34 Cr for the financial year 2021-22. This GST demand notice came at a time when Alibaba Group’s Antfin offloaded 14.13 Cr shares of the foodtech company. The investor sold the shares at INR 289.91 apiece, translating to an INR 4,096.7 Cr block deal.

Eternal, which also operates Blinkit, District and Hyperpure, reported a 90% decline in its consolidated net profit to INR 25 Cr in the first quarter of the ongoing financial year (Q1 FY26), from INR 253 Cr in the same quarter last year.

This decline in its profit came on the back of the company’s continuous investments in Blinkit. In the quarter under review, Blinkit overtook Eternal’s food delivery vertical Zomato in terms of revenue. The quick commerce arm’s operating revenue for the quarter stood at INR 2,400 Cr, recording an over 2.5X growth from INR 942 Cr in Q1 FY25.

While Blinkit has taken over the centre stage in terms of Eternal’s growth landscape, Zomato also continues to show steady growth. The food delivery business reported an operating revenue of INR 2,261 Cr in Q1 FY26, up 16% from INR 1,942 Cr in the same quarter previous year. Even its adjusted EBITDA rose to INR 451 Cr during the quarter under review from INR 313 Cr in the year-ago quarter.

However, for Eternal, Zomato is reporting the slowest growth among all its other verticals.

It is pertinent to note that Blinkit’s 10-minute food delivery service Bistro has also gained a lot of traction from users, making Eternal one of the leading players in the food delivery space.

As of now, Bistro operates 38 kitchens across Delhi NCR and Bengaluru. Furthermore, Eternal plans to invest INR 150 crore in Bistro, the AI-native no-code customer support platform Nugget, and its Greening India initiative.

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