Eternal GST demand: ₹31.25 crore West Bengal orders (FY20-22)

What the West Bengal GST orders allege

Eternal Limited, formerly Zomato Limited and the parent of Zomato and Blinkit, has received multiple GST demand orders from West Bengal tax authorities for alleged short payment of output tax. The demands span two separate periods and include tax, interest, and penalties. The larger set of orders relates to April 2020 to March 2022, while another order relates to April 2019 to March 2020. Across these orders, the total value cited is nearly ₹31.25 crore. Eternal has said it intends to challenge the orders through appeals.

Two orders for FY20-FY22: ₹27.56 crore total demand

In a regulatory filing, Eternal disclosed it received two orders dated January 8, 2026, issued by the Additional Commissioner of State Tax (Appeals), West Bengal. These orders relate to the period from April 2020 to March 2022 and confirm a total GST demand (tax component) of ₹16.72 crore. The orders also include interest of ₹9.16 crore and a penalty of ₹1.67 crore. Taken together, the confirmed demand across tax, interest, and penalty is over ₹27.56 crore. The company said it will file an appeal against these orders before the appropriate authority.

Separate order for FY20 (Apr 2019 to Mar 2020): ₹3.70 crore total

Eternal also disclosed another GST demand order for an earlier period, April 2019 to March 2020. The order was received on January 6, 2026, and was also issued by the Additional Commissioner of State Tax (Appeals), West Bengal. It confirms GST demand (tax component) of ₹1.92 crore, along with interest of ₹1.58 crore and a penalty of ₹0.19 crore (₹19.24 lakh). This takes the total demand for that period to ₹3.70 crore. The company said this demand relates to alleged short payment of output tax, along with applicable interest and penalty.

Combined exposure across the West Bengal orders

Putting the disclosed orders together, the West Bengal demands total nearly ₹31.25 crore. The components mentioned across the disclosures include ₹18.64 crore of tax, about ₹10.7 crore of interest, and penalties of roughly ₹1.86 crore. Eternal’s filings position the matter as a tax dispute linked to the department’s view of GST treatment and the company’s filings for the relevant periods. The company has also noted that the matter is not framed as a case where tax evasion has been proven, but as a disagreement over interpretation and tax treatment.

Eternal’s response and plan to appeal

Eternal has stated it disagrees with the demand orders and believes it has “a strong case on merits.” It also said its position is supported by opinions from external legal and tax advisors. The company has indicated it will pursue appeals before the appropriate authority for the West Bengal orders. Alongside this, Eternal has said it does not expect the orders to have a material financial impact on its business. These disclosures are consistent across the company’s filings related to the separate periods.

Why GST ‘output tax short payment’ disputes arise

Output tax disputes typically revolve around how a company classifies supplies, determines the place of supply, or applies GST rates to different revenue streams and transactions. Tax authorities may interpret the nature of certain supplies differently from the taxpayer and seek additional output tax. When authorities raise a demand, statutory interest and penalties can increase the total amount beyond the principal tax component. In Eternal’s case, the disclosures specifically point to alleged short payment of output tax, with interest and penalties added for the relevant periods.

A growing trail of GST disputes around Eternal

The West Bengal demands add to a wider set of GST-related disputes faced by the Deepinder Goyal-led company over the past two years. The company has faced multiple tax notices during this period, including a ₹803 crore demand in 2024 that it continues to contest. Separately, the company has also disclosed other GST actions in different states in recent periods. The recurring theme across these matters is that Eternal has said it plans to contest the orders or notices through legal remedies.

Other disclosed GST actions mentioned in the broader context

Beyond West Bengal, Eternal has disclosed a GST demand order of ₹128.4 crore issued by the Uttar Pradesh State Tax Department. This includes a principal demand of ₹64.2 crore and an equivalent penalty of ₹64.2 crore, linked to alleged short payment of output tax and excess availment of input tax credit for April 2023 to March 2024, along with interest as applicable. In the context provided, it is also mentioned that in 2024 the company received four GST notices of ₹202 crore, ₹4.6 crore, ₹17.7 crore, and ₹803.4 crore. Additionally, in August 2025, it received two GST demands, one of ₹1.3 crore from Uttar Pradesh and another of ₹40 crore from Karnataka authorities.

Key figures at a glance

Market impact: what the company has said

Eternal has explicitly stated that it does not expect the West Bengal demand orders to have a material impact on its business. The company’s filings focus on its intention to appeal and its assessment that it has a strong case on merits. From an investor perspective, the immediate point to track is the legal process and how quickly appeals are filed and heard. Since no stock movement figures were provided in the disclosed context, the market reaction cannot be quantified here. What is clear is that the company is treating the demands as contestable matters rather than settled liabilities.

Why the development matters for investors tracking the stock

Large GST demands can draw attention because they may create uncertainty around compliance positions and future cash outflows if disputes are decided against the taxpayer. In this case, the West Bengal orders are sizeable in aggregate and come alongside other GST actions cited across states, which investors often evaluate as part of regulatory and litigation risk. At the same time, the company’s position is that these are interpretational disputes and that it expects no material impact. The actual financial outcome will depend on the appellate process and final decisions by the relevant authorities.

Conclusion

Eternal’s latest disclosures show West Bengal GST demand orders totalling nearly ₹31.25 crore across FY20 to FY22, including tax, interest, and penalties. The company has said it will appeal and maintains that it has a strong case on merits, supported by external advisors. These orders sit within a broader backdrop of multiple GST disputes and notices disclosed over the past two years, including a ₹803 crore demand in 2024 that remains under contest. The next concrete milestone will be the filing and admission of appeals before the appropriate authorities for the West Bengal orders received in January 2026.