JOIN USZomato, Swiggy brought under GST ambit: What it means for customers
The GST Council on Friday decided that food delivery platforms like Swiggy and Zomato will charge customers 5 per cent Goods and Services Tax (GST), instead of restaurants where the food is ordered from, on restaurant services provided by the food delivery apps to prevent tax evasion.
This is not a new tax and customers will not have to pay any extra for food deliveries. “Regarding Swiggy-like operators and gig offices, it has been decided that since the place where food is delivered will be the point where tax is collected, the Swiggy-like operator who will be collecting tax will pay up the GST on it,” Finance Minister Nirmala Sitharaman said, clarifying that this is not a new tax.
Cloud kitchens have also been brought into the restaurant services category and will have to pay 5 per cent GST to the government.
“The tax was payable by restaurants, now instead of restaurants, it will be payable by aggregators, which will also prevent revenue leakage,” Revenue Secretary Tarun Bajaj said.
The level of tax evasion in India had gone up with a rise in food delivery, especially from unregistered entities, the fitment panel had earlier stated. Many restaurants are not paying GST and some small eateries are not even registered. Therefore, the panel had suggested making the restaurants pay on behalf of the eateries.
The above image shows a Swiggy bill of Rs 145. According to the previous rules, restaurants charged 5 per cent GST, which is Rs 7.25 in this case, and no tax was charged by the food delivery platform. This 5 per cent GST will now be collected by Swiggy to pay to the government. Hence, there will be no change in the price for the end-user.
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