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Taxing Times for Swiggy: UP GST Dept. Spices Things Up with Fresh ₹67 Lakh GST Demand

Swarnadwip Nath Published Aug 11, 2025, 10:57 PM Updated Sep 16, 2026, 02:18 AM

Swiggy Ltd, the Indian food delivery major, is in the spotlight after the Uttar Pradesh State Goods and Service Tax department issued a fresh GST demand order for the period April 2023 to March 2024. The order, passed by the Deputy Commissioner, mandates the company to pay Rs 30,12,338 as GST, with an additional Rs 6,93,311 as interest and a matching Rs 30,12,338 as penalty. Swiggy received official intimation of this order on August 10, 2025, marking the latest in a series of regulatory hurdles for the tech unicorn.

Key Developments at a Glance

The order was issued by the Deputy Commissioner, Uttar Pradesh State Goods and Service Tax department, targeting Swiggy’s GST compliance for the previous financial year.
The demand includes three components: GST dues (Rs 30.12 lakh), interest (Rs 6.93 lakh), and penalty (Rs 30.12 lakh), pushing the total claim above Rs 67 lakh.
The main allegation centers on Swiggy’s claim of input tax credit (ITC) which, according to tax authorities, was incorrectly availed.
Swiggy maintains it has robust grounds to contest the order and has initiated steps for appeal, asserting the move will not significantly impact company financials or operations.

Background: Surge in Tax Scrutiny for Foodtech Platforms

This GST action highlights intensifying regulatory oversight on leading online food delivery platforms. Swiggy and rival Zomato have encountered increased scrutiny over tax compliance, especially relating to delivery charges, TCS calculations, and ITC claims. Previous orders against Swiggy involved substantially larger sums, with earlier GST demands exceeding Rs 326 crore for issues similar in nature, including non-payment of GST on delivery fee collection. Swiggy’s ongoing appeals signal a wider industry pushback against what many firms believe are ambiguous or evolving GST rules.

Allegation Details: The ITC Dispute Unpacked

The Uttar Pradesh GST department alleges that Swiggy wrongly claimed ITC on certain supplies, potentially breaching Section 9(5) and related provisions of the CGST Act. While a clarification from the central government has eased some confusion for foodtech operators, grey areas remain regarding ITC eligibility on non-restaurant supplies routed through e-commerce platforms. The department’s order does not directly accuse Swiggy of fraud, but highlights categorization issues in their GST filings for FY24.

Company’s Response and Financial Impact

Swiggy states its accounting and legal teams are preparing for an appeal process, confident in their defense.

The company’s initial assessment points to no major adverse effect on finances, with order value considered immaterial relative to overall FY25 revenue.

Swiggy reiterates that the operational impact will be minimal, and normal business continues amid legal proceedings.

Industry Context and Expert Views

With upcoming clarifications from the GST Council and Ministry of Finance, platforms like Swiggy may see changes in compliance requirements. Industry observers advise stakeholders to closely track ongoing tax litigation and align accounting practices with new circulars. The trend underscores the need for digitized tax records and proactive compliance for all entities functioning as electronic commerce operators, including regular monitoring of TCS and ITC provisions.

Looking Ahead

As Swiggy launches its appeal, the outcome may set a precedent for future actions against leading food delivery platforms. With GST regimes for digital businesses still evolving, both regulatory bodies and market players continue to adjust their frameworks for a rapidly digitizing economy.

Source: Company Disclosure to the Stock Exchanges

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