Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 912

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 2
Chunk 912
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 of its vehicles. Based on the insurance coverage, the Company
is confident that liability, if any, arising from the claims under the previous business model will be covered by the insurance. Further,
under the current business model of the Company, wherein the Company acts only as a facilitator, any issues arising from breach of any
terms including improper use of vehicles and/or physical damages made to the vehicles or any mechanical issues in the vehicle will be
the responsibility of either the host or the customer. While uncertainties are inherent in the final outcome of these matters, the Company
believes that the disposition of these proceedings will not have a material adverse effect on the Company’s financial position,
results of operations or cash flows.

70

(B)The Company has received various orders and show cause notices
from Indian indirect tax authorities relating to disputes on input tax credits, service tax liabilities, GST dues, and taxability of
car rental revenue for periods between 2014 and 2023, totaling $15,934,836 (March 31, 2024: $7,984,418). These disputes include disallowance
of input credits, service tax liabilities on booking fees and penalty charges, disputes on goods and service tax input availed, and GST
demands on gross booking value. The Company has taken necessary steps, including filing appeals, submissions, and deposits, and is awaiting
further communication from the authorities. In relation to the GST demands on gross booking value, the Company has filed a writ petition
with various authorities challenging the order. Based on the submissions provided and documents available, management believes that no
significant outflow is expected, and therefore, no provision has been recorded as of December 31, 2024, and March 31, 2024.

(C)In February 2023, a former employee of Zoomcar India instituted
a suit before the City Civil and Sessions Judge at Mayo Hall, Bengaluru against Zoomcar India, Zoomcar, Inc. and Zoomcar Holdings, Inc.
(formerly IOAC) challenging his termination, claiming damages amounting to $396,457 and claiming that 100,000 options to purchase shares
of Zoomcar, Inc. have vested. On March 3, 2023, the City Civil and Sessions Judge at Mayo Hall, Bengaluru, issued an interim injunction
to restrain each of Zoomcar, Inc. and Zoomcar Holdings, Inc. from “alienating or dealing” the 100,000 shares of Zoomcar,
Inc