Foodpanda, an online food and grocery delivery platform owned by Berlin-based Delivery Hero, has been charged with a number of problems – from VAT evasion to supplying substandard foods and depriving delivery staff of their due benefits.
Foodpanda collects food and grocery items from around 5,000 restaurants and stores and delivers products to the doorsteps of consumers through riders or delivery workers across the country under an agreement of sharing commission.
Riders, consumers and insiders of Foodpanda have recently shared their bitter experiences.
“Pulling a rickshaw is better than a Foodpanda job,” a rider said to describe how hard work he has to do throughout the week against very poor pay.
Another delivery man said Foodpanda gives him less when a customer gives some tips. Allah blesses the people in the head office,” he says.
“Foodpanda should be sued as it doesn’t fix basic salary for riders,” said a worker.
Just recently, its riders went on a strike in Dhaka, Rajshahi and Sylhet states on an 8-point demand including increasing delivery rates and other benefits. They said they ensured food deliveries defying all adverse situations but the authorities have been denying them rightful demands over the years.
This is not the end of the complaints against Foodpanda. The food and grocery delivery platform is facing numerous complaints from customers because of providing deficient foods and dilly-dallying in refunding the money in case of order cancellation.
Additionally, Foodpanda was charged with overcharging and on September 11, last month the Directorate of National Consumers’ Rights Protection fined the platform in this connection.
Dodges VAT concealing actual sales
The VAT Intelligence Directorate, in October 2020 conducted a drive at Foodpanda’s head office in Gulshan, where they found evidence of evasion of Tk3.4 crore in Value Added Tax (VAT).
A VAT evasion case was filed against Foodpanda Bangladesh Limited by the directorate and the case is still pending.
During the drive, VAT Intelligence authorities smell that Foodpanda has been doing business since 2013 by registering under Code S-099.10, which does not apply to their type of business.
The company was doing it in order to gain the facility of 0pc VAT on rent, the directorate added.
Foodpanda delivers food by using an electronic network (online platform). The code for these sorts of services is S-099.60. According to the law, they were supposed to pay 5pc VAT on the business and 15pc VAT on rent.
During the raid, sales data of Tk27.58 crore was discovered in a computer for the period of July 2019 to January 2020 and April 2020. But Foodpanda only disclosed sales data of Tk15.65 crore during this period.
The VAT directorate also discovered that in 8 months only the company concealed sales data of Tk11.93 crore from the government.
Foodpanda helps restaurants evade VAT
It receives orders through online-based apps like Pathao Food, Sohoj Food and others and delivers them to the doorsteps of the customers. They are supposed to ensure that the government gets due VAT against the sales. But that was not the case.
Foodpanda did not maintain the actual sales data and it does not provide the details in its VAT return statement, according to the VAT intelligence agency.
Hence, the food supply stores also do not show the sales information that comes from the apps in their VAT returns. By doing so Foodpanda is helping hotels and restaurants evade VAT.
“We have recently visited some restaurants from where Foodpanda gets food. We have found that the government is deprived of due VAT,” said an NBR authority.
The NBR has already started verifying electronic fiscal device information of at least 318 hotels and restaurants that supply food to Foodpanda for its customers.
It has already found VAT dodging evidence against Burger Express, Kaderia Cafe, Street Oven, Cheese Restaurant, Ghost House and Pizza King, according to the authority.
Apart from this, the Dhaka North VAT Commissionerate is investigating whether these hotels and restaurants are evading VAT in collaboration with Foodpanda, Pathao Food, Sohoj Food and other online food service providers.
The overall situation could be worrying for Foodpanda, which claims to be Asia’s largest food delivery company, as it is having a tough time in several other Asian countries, including Myanmar, Thailand, and Hong Kong.
After several phone calls and text messages, Ambareen Reza, co-founder and CEO of Foodpanda Bangladesh, replied in a message that one of her relatives survived a heart attack and she could not comment anything now.
