Urban Company has received a show-cause notice from the Directorate General of GST Intelligence, Mumbai, for non-payment of tax. In an exchange filing, the company stated that it has received a notice for non-payment of a tax amounting to Rs 51.3 crore.
Furthermore, Urban Company said that the show cause notice also contains a penalty and interest imposed on the company for tax evasion. The matter pertains to the non-payment of GST during the period from April 2021 to March 2025 across various states in India.
What’s the reason behind the show-cause notice ?
In the exchange filing, Urban Company stated that it has been paying 5% GST under Section 9(5) of the CGST Act 2017 on payments made to professionals providing plumbing, carpentry, electrician, and cleaning services. The company said that it has been covering them under housekeeping services.
However, in the show-cause notice, the tax authorities stated that the scope of housekeeping services under Section 9(5) also encompasses appliance repair, appliance servicing, and painting, the other services that Urban Company offers.
Urban Company’s response
Urban Company stated that it has a strong case on merits, which is supported by its legal and tax advisors. The company stated that it will respond to the show-cause notice within the prescribed timeline.
Further, Urban Company said that the show cause notice will not impact its financial, operational or other activities.
Urban Company listing
Urban Company made its debut at the stock exchanges on September 17. The company’s IPO received a positive response from investors, with its shares listed at a 57.5 per cent premium. On the listing day, the company’s stock closed in green at Rs 169.
On Tuesday, Urban Company’s stock was trading down 2.68 per cent, intra-day.