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Maharashtra GST slaps ₹56.4 Cr tax demand on Urban Company over service payments
Tax officials say the consumer services platform failed to pay GST on certain categories of services offered through its marketplace.
Maharashtra’s goods and services tax (GST) authorities have issued a tax demand and penalty notice of ₹56.4 crore to Urban Company, alleging non-payment of GST on certain service categories facilitated through its platform during the April 2021 to March 2025 period.
Urban Company disclosed in an exchange filing that the notice, issued by the Thane office of the joint commissioner of central GST and central excise, comprises ₹51.3 crore in alleged tax dues and ₹5.13 crore in penalties. The demand stems from a dispute over how GST applies to payments made by the company to service professionals operating on its platform.
According to Urban Company, it has been charging a 5% GST on payouts to professionals offering services such as cleaning, carpentry and plumbing, which it classifies under housekeeping services. However, tax authorities contend that additional service categories, including painting and appliance repair, also fall under Section 9(5) of the CGST Act, 2017. This provision requires e-commerce operators to discharge GST liabilities for certain notified services supplied through digital platforms.
The GST department has maintained that Urban Company should have paid tax on payouts for all such services during the assessment period, leading to the cumulative demand.
Urban Company said it plans to challenge the order before the appropriate appellate authority and believes it has strong legal grounds to contest the demand. The company added that the notice is not expected to have any material impact on its operations, financial position or business continuity.
This is not the first time the consumer services platform has faced GST scrutiny. Authorities in Tamil Nadu, Maharashtra and Haryana have previously issued multiple tax demand notices to the company, collectively amounting to over ₹51 crore. These include a ₹20.4 crore notice from Haryana related to the expanded definition of housekeeping services and discrepancies in input tax credit claims, as well as demands from Maharashtra and Tamil Nadu over commission income and valuation of services.
Founded in 2014, Urban Company operates an online marketplace connecting consumers with service professionals across categories such as home maintenance, personal care and appliance services. In 2023, the company expanded into consumer electronics with the launch of its in-house “Native” product range, which includes smart doors and water purifiers.
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