Swiggy Gets Rs 158-Crore Assessment Order From Income Tax Department
The alleged tax evasion pertains to cancellation charges paid to merchants, and on the interest income on income tax refund.
Swiggy Ltd. received an assessment order for Rs 158.25 crore from the Bengaluru authority of the Income Tax Department, according to an exchange filing on Tuesday.
The order, which was received by the food delivery major on Saturday, pertains to financial year 2021-22.
The alleged tax evasion pertains to cancellation charges paid to merchants, and on the interest income on income tax refund.
"The company believes that it has strong arguments against the order and is taking necessary steps to protect its interest through review/appeal," Swiggy said.
The company added that the order has no major adverse impact on its financial or operations.
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Last week, analysts at Bank of America downgraded Swiggy to ‘underperform’ from ‘buy’. The target price of Swiggy saw a cut, being slashed to Rs 325 from Rs 420.
The analysts stated that they remain positive on medium-term prospects, but the downgrades are due to expectations of growth slowing down and a sluggish rate of margin improvement in food delivery business.
Shares of Swiggy on Tuesday closed 0.5% higher at Rs 331.55 per share on the BSE, compared to a 1.8% decline in the benchmark Nifty 50. The stock has declined by around 27% from the month of listing, and by around 38% year-to-date.
Twelve out of the 19 analysts tracking the company have a 'buy' rating on the stock, three suggest a 'hold,' while four recommend a 'sell', according to Bloomberg data.
