Zomato, Swiggy orders may soon attract GST: Here’s how food delivery can put a hole in your pocket

New Delhi: The Goods and Services Tax (GST) Council is scheduled to meet on Friday, September 17 to discuss important issues like whether to bring petrol and diesel under the ambit of GST. Apart from all other matters, the GST Council is also expected to decide whether food orders through app-based online food delivery services such as Zomato and Swiggy will attract additional taxes.

For millions of Indians who regularly order from online food delivery platforms, this decision could come as a major blow, as the additional GST will mean an extra burden on their pockets.

There is also a proposal to levy additional GST on food orders in the agenda of the GST Council meeting to be held on Friday this week. The fitment committee of the GST Council had suggested the imposition of additional tax on online food orders.

The Committee proposes that there is a need for clarity with regard to taxation on food distribution. The Committee is of the view that there is ambiguity on whether doorstep or takeaway services by Cloud Kitchens or Central Kitchens fall under “restaurant service”.

The fitment committee has also placed two solutions before the GST Council: Either classify e-commerce operators (ECOs) as deemed suppliers or aggregators. If the council goes with the first option, then

If the Council goes with the option of “Deemed Suppliers”, the ECOs will be tagged under two categories. In this case the GST rate will be 5 per cent without input credit and 18 per cent with input credit from restaurant to ECO. Read also: iPhone 13 launch: Desi netizens go gaga over ‘Dum Maaro Dum’ inspired song in launch video

However, if the Council notifies the ECO as an aggregator in the next meeting, the tax rate will be decided later. Read also: Cabinet approves Rs 26,000 cr PLI scheme to boost auto sector, local manufacturing

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