Zomato and Blinkit parent Eternal faces Rs128 crore GST demand

Eternal, the parent company of food delivery platform Zomato and quick commerce service Blinkit, said that it had received a goods and services tax (GST) demand order from Uttar Pradesh authorities totaling more than ₹128 crore, including interest and penalties. The order, issued by the Deputy Commissioner of State Tax in Lucknow, pertains to alleged short payment of output tax and excess input tax credit claimed between April 2023 and March 2024.

The company said the demand encompasses tax, interest, and penalties as determined by state authorities. Eternal also asserted that it believes it has a strong case and will file an appeal before the appropriate authority.

The announcement comes shortly after Eternal reported a consolidated net profit of ₹65 crore for the second quarter ended September, driven in large part by growth in its quick commerce business.

The company, which rebranded as Eternal in March, had posted a net profit of ₹176 crore in the June-September quarter of the previous fiscal year. In a regulatory filing, Eternal noted that the results are not directly comparable with the same period last year due to its August 2024 acquisition of Orbgen Technologies Pvt Ltd and Wasteland Entertainment Pvt Ltd—holdings of One 97 Communications Ltd, the parent of Paytm—covering the “movie ticketing” and “events” businesses.

In a letter to shareholders, Eternal cautioned that it anticipates “a slow uptick in growth rate in the near term” for Zomato’s food delivery net order value (NOV), citing headwinds including soft discretionary consumption, the impact of quick commerce growth, and increasingly volatile weather conditions.

“In line with our expectation, NOV growth rate (YoY) did go up in Q2FY26 after declining consistently for the last five quarters. Having said that, the recovery in growth has been slower than expected and we only expect a slow uptick in growth rate in the near term,” Eternal Founder Deepinder Goyal said.

“While we continue to work on inputs to the business, we are also constantly fighting multiple headwinds including soft discretionary consumption in general in India, the impact of quick commerce growth and increasingly volatile weather (extreme heat, extended rains), which continue to weigh on near term growth,” he added.

Zomato’s food delivery NOV grew 14 percent year on year, a slight improvement from 13 percent in the previous quarter. For the quarter, Eternal’s revenue from operations reached ₹13,590 crore, up from ₹4,799 crore in the year-ago period, while total expenses stood at ₹13,813 crore, compared with ₹4,783 crore a year earlier.

Eternal’s reporting segments include India food ordering, quick commerce, Hyperpure supplies (B2B business), going out, and other residual segments. The quick commerce segment posted its strongest growth in ten quarters, with NOV rising 137 percent year on year to ₹11,679 crore from ₹4,928 crore a year ago. Adjusted revenue for the segment surged 756 percent to ₹9,891 crore from ₹1,156 crore.

Regarding the GST rate rationalization effective September 22, Eternal said the cuts have reduced the average tax on Blinkit’s typical basket by nearly three percentage points, which is expected to boost demand.

The company now expects to reach 2,100 Blinkit stores by December 2025, up from its previous guidance of 2,000, with CEO Albinder Dhindsa expressing confidence in reaching 3,000 stores by March 2027.

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