Eternal Faces Rs. 128 Crore GST Demand Amid Blinkit Growth and Zomato Rebrand:

Eternal Faces Rs. 128 Crore GST Demand Amid Blinkit Growth and Zomato Rebrand Eternal, the parent company of food delivery platform Zomato and quick commerce service Blinkit, has reportedly received a Goods and Services Tax (GST) demand order from the Uttar Pradesh tax authorities amounting to over Rs. 128 crores, inclusive of interest and penalties. The order was issued by the Deputy Commissioner, State Tax, Lucknow, Uttar Pradesh, in connection with alleged short payment of output tax and excess availment of input tax credit for the period between April 2023 and March 2024. The company added that they have a strong case regarding the facts and will file an appeal against the order before the appropriate authority.

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In a regulatory filing, Eternal said, "This is to inform you that the Company has received an order on 18 October 2025 for the period April 2023 to March 2024 passed by the Deputy Commissioner, State Tax, Lucknow, Uttar Pradesh, confirming a demand of GST of Rs 64,17,43,503 with interest as applicable and a penalty of Rs 64,17,43,503." The company rebranded itself as Eternal in March from Zomato earlier. Eternal, the parent company of Zomato and Blinkit, reported consolidated net profit of Rs. 65 crore for the second quarter ending in September. The company said that its quick commerce arm, Blinkit, played a major role in driving revenue growth during the period. Eternal, which rebranded in March, had posted a net profit of Rs. 176 crore in the same quarter last year. However, the company explained that the results are not directly comparable because of recent acquisitions. In August 2024, Eternal completed the purchase of Orbgen Technologies Pvt Ltd and Wasteland Entertainment Pvt Ltd, the firms behind Paytm’s movie ticketing and events businesses. These new additions have expanded Eternal’s portfolio beyond food delivery and quick commerce, helping it strengthen its presence in the wider digital services space. In a letter to shareholders, Eternal said it expects "a slow uptick in growth rate in the near term" for the food delivery net order value (NOV) for Zomato, due to multiple headwinds including soft discretionary consumption, the impact of quick commerce growth and increasingly volatile weather conditions.

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"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.” "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," Eternal Founder Deepinder Goyal stated on the outlook for the food delivery NOV growth rate. Zomato’s food delivery business grew 14% year-on-year (YoY) in the September quarter, slightly higher than the 13% growth seen in the previous quarter. Eternal’s revenue from operations rose to Rs.13,590 crore, up from Rs. 4,799 crore a year earlier, while total expenses increased to Rs.13,813 crore from Rs. 4,783 crore. The company’s quick commerce segment (Blinkit) saw strong growth, with net order value (NOV) jumping 137% YoY to Rs. 11,679 crore, its highest in ten quarters. Adjusted revenue for the segment surged 756% to Rs. 9,891 crore from Rs. 1,156 crore last year.

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Eternal said that the recent GST rate cuts have reduced the average tax on Blinkit’s orders by about 3 percentage points, which is expected to boost demand further. "This has had a slight negative impact on the growth of the business, as we have passed on this tax burden to customers. There was no impact on the delivery charge paid by customers on Blinkit - it already includes 18 per cent GST. Given the model of engagement with delivery partners, there is a difference as compared to food delivery and nothing changes on that front for us," Akshant said in the letter to shareholders. Eternal shared that the transition to the inventory ownership in quick commerce is almost complete, with nearly 80 per cent of net order value (NOV) in Q2 FY26 on the own inventory model. Eternal said it now plans to open 2,100 Blinkit stores by December 2025, up from its earlier target of 2,000. Blinkit CEO Albinder Dhindsa added that the company is confident of reaching 3,000 stores by March 2027. Expressing his views on new food delivery apps like Toing and Ownly, Zomato CEO Deepinder Goyal said the company is not planning to launch a separate new app. He added, 'It appears that these apps are specifically targeting budget-conscious customers.' At our end, we believe that the Zomato app should be able to solve for these use cases without needing a new app, which is why we lowered the minimum order value for free delivery from Rs 199 to Rs 99 for Gold members. He further added, "We believe that launching another food delivery (aggregation) app to differentiate between target audiences has to be a carefully thought-out decision, since it significantly increases organizational complexity. We will wait and watch and are okay being the last mover if, over time, it becomes clear that introducing a new app is the right long-term approach for targeting budget-conscious customers."