Gurugram-based City Firm has obtained a items and companies tax (GST) demand and penalty totalling Rs 56.43 crore from Maharashtra GST authorities, escalating a long-running dispute over how sure companies provided on its platform needs to be categorized for tax functions.

In a regulatory submitting, City Firm Restricted stated the Joint Commissioner of CGST and Central Excise, Thane, handed an order on December 19, 2025, confirming a GST demand of Rs 51.30 crore together with a penalty of Rs 5.13 crore for the interval from April 2021 to March 2025. Curiosity would additionally apply as per the provisions of the CGST Act, 2017.

The corporate stated it could enchantment the order earlier than the suitable authority.

The case pertains to alleged non-payment of GST beneath Part 9(5) of the CGST Act, which makes ecommerce operators liable to pay tax on sure notified companies.

Urban Company stated it has been discharging GST on the charge of 5% on funds made to professionals offering plumbing, carpentry, electrician and cleansing companies, treating these choices as housekeeping companies beneath the legislation.

Nonetheless, the Thane GST authority has taken the view that the scope of housekeeping companies beneath Part 9(5) additionally extends to equipment restore, equipment servicing and portray companies. Based mostly on this interpretation, the division raised a tax demand on payouts made to service professionals rendering these companies throughout the interval beneath evaluate.

“The Firm might be submitting an enchantment in opposition to the order earlier than the suitable authority. We consider that we now have a powerful case on deserves, supported by the opinion of our exterior authorized and tax advisors,” City Firm stated in its submitting.

The corporate additionally stated the order wouldn’t have any affect on its monetary place, operations or different actions.

This isn’t City Firm’s first dispute with GST authorities. The corporate is already contesting at the very least three different demand notices totalling Rs 51.3 crore from GST departments in Haryana, Maharashtra and Tamil Nadu.

Haryana authorities have issued a requirement of Rs 20.4 crore linked to an expanded definition of housekeeping companies and mismatches between GSTR-2A and enter tax credit score claimed for 2018-19. Maharashtra officers have individually raised a requirement of Rs 14.6 crore over GST on fee revenue earned within the state however deposited in Haryana, whereas Tamil Nadu authorities have issued a Rs 15.97 crore demand after contemplating the total worth of companies equipped. All these notices are beneath dispute.

Based in 2014, City Firm operates a hyperlocal companies platform connecting shoppers with service professionals. Lately, it has expanded into client electronics by means of its ‘Native’ product line and launched ‘Insta Assist’, a 15-minute maid reserving service.

The corporate reported a web lack of Rs 59.3 crore in Q2 FY26, a pointy improve from Rs 1.8 crore in the identical quarter final yr. Working income rose 37% yr on yr and 4% sequentially to Rs 380 crore during the quarter.