Gurugram-based hyperlocal services platform Urban Company has received a goods and services tax demand and penalty amounting to ₹56.43 crore from Maharashtra GST authorities. The development escalates a long-running dispute over the tax classification of services offered on the company’s platform.
Details of the Tax Demand
In a regulatory filing, Urban Company Limited said the Joint Commissioner of CGST and Central Excise, Thane, passed an order on December 19, 2025, confirming a GST demand of ₹51.30 crore along with a penalty of ₹5.13 crore for the period from April 2021 to March 2025. Interest will also apply as per provisions of the CGST Act, 2017.
Company’s Response
Urban Company said it will challenge the order before the appropriate appellate authority. The company added that it believes it has a strong case on merits, supported by opinions from external legal and tax advisors. It also stated that the order will not have any impact on its financial position, operations or other activities.
Core Issue Under Dispute
The case relates to alleged non-payment of GST under Section 9(5) of the CGST Act, which places tax liability on ecommerce operators for certain notified services. Urban Company said it has been paying GST at 5 percent on payouts to professionals offering plumbing, carpentry, electrician and cleaning services, classifying them as housekeeping services.
Differing Interpretation by Authorities
The Thane GST authority has taken the view that the definition of housekeeping services also covers appliance repair, appliance servicing and painting services. Based on this interpretation, tax has been demanded on payouts made to service professionals providing these services.
Other Pending GST Disputes
Urban Company is already contesting at least three other GST demand notices totalling ₹51.3 crore from authorities in Haryana, Maharashtra and Tamil Nadu, covering issues ranging from expanded service definitions to commission income and valuation of services.
Business and Financial Context
Founded in 2014, Urban Company connects consumers with service professionals and has expanded into consumer electronics and rapid maid booking. The company reported a net loss of ₹59.3 crore in Q2 FY26, while operating revenue rose 37 percent year-on-year to ₹380 crore.
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