Urban Company Faces GST Scrutiny Over Tax Filing Irregularities

Urban Company has been issued a show cause notice (SCN) from the GST authorities concerning alleged discrepancies in its tax filings for the financial year 2023. This information was disclosed in a regulatory filing submitted to the stock exchanges.

The notice, which was sent by the Commercial Tax Officer in Chennai on May 4, 2026, highlights inconsistencies between the turnover reported in GSTR-1 and GSTR-3B filings, as well as claims indicating an excess input tax credit (ITC). The total tax demand has been set at Rs 8.7 crore, which includes interest and penalties, covering the period from April 2022 to March 2023.

Urban Company’s Position on the Notice

Urban Company maintains that it has complied with tax regulations on the turnover it has reported, and that its claims for input tax credit (ITC) are lawful. The company asserts that, as an e-commerce entity, certain transactions, which fall under Section 9(5) of the CGST Act, have been mistakenly categorised as its own turnover, resulting in an inflated tax demand.

Response Strategy and Financial Impact

The firm, based in Gurugram, stated that it has a robust case supported by external legal and tax experts and intends to formally reply to the notice within the required timeframes.

Furthermore, Urban Company has indicated that the show cause notice is not anticipated to significantly affect its financial position, operations, or general business activities at this time.

As of now, the company has yet to disclose its results for the fourth quarter of FY26. In the third quarter of FY26, it reported an operating revenue of Rs 383 crore, with net losses of Rs 21 crore largely due to ongoing investments in its high-frequency housekeeping platform, InstaHelp. Notably, in March, InstaHelp surpassed 1 million monthly bookings.