Govt plans 5% GST on Swiggy, Zomato deliveries
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Govt plans 5% GST on Swiggy, Zomato deliveries
The all-powerful GST Council is likely to discuss on Friday a proposal to treat food delivery apps such as Zomato and Swiggy as restaurants and levy 5 per cent GST on supplies made by them, an official said.
A proposal to make the delivery platforms liable to pay the Goods and Services Tax (GST) on restaurant services supplied through them is one of over four-dozen proposals that will be taken up by the Council at its meeting in Lucknow on September 17.
If approved, the apps would be given certain time to make changes in their software to allow for such tax to be charged.
Once approved by the GST Council, food delivery apps will have to collect and deposit GST with the government, in place of restaurants, for deliveries made by them. There would be no extra tax burden on the end consumers.
As per estimates, tax loss to exchequer due to alleged under-reporting by food delivery aggregators is Rs 2,000 crore over the past two years.
Under GST, these apps are currently registered as Tax Collectors at Source (TCS).
One of the reasons for designing such a proposal was that there was no mandatory registration check by Swiggy / Zomato and there were unregistered restaurants supplying through these apps.
Even though the rate of tax is low, since food delivery volumes are high, the tax evasion amount is also substantial, the official said.
Analysis of returns filed by delivery apps and the restaurant services for the state of Haryana showed that for Zomato, the gap in taxable turnover for suppliers where TCS was deducted by Zomato was greater than the turnover declared by such suppliers. Therefore, there was evasion of tax.
Similarly, in the case of Swiggy, there was a gap in taxable turnover for suppliers where TCS deducted by the app was greater than the turnover declared by such restaurant suppliers.
Accordingly, the suggestion of food delivery apps collecting and depositing GST with the government would be placed before the GST Council, the official added.
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as per the article
Once approved by the GST Council, food delivery apps will have to collect and deposit GST with the government, in place of restaurants, for deliveries made by them. There would be no extra tax burden on the end consumers.
I think it is best move by government as there is not impact of consumer, only the liability of gst will be on swiggy & zomato, it will close any tax evasion by restaurants.
Read it again, when you order food from small restaurants which are not registered under gst, you effectively pay no tax on that but now as tax is paid by swiggy. So you have to pay gst on all orders now and that the reason govt want to apply it on swiggy or zomato. So ultimately consumer is in loss. Think it like if there is no impact on consumer, there can’t be any additional tax which govt can receive. And if no additional tax then why to change provision. Read it again u can see a big difference between turnover reported vs gst collected.
it is mandatory for any business using aggregator service to register under GST.
Today swiggy/zomato dont have that check hence it makes sense to make them pay GST instead of the restaurant.
Why people hate This government.. ghar ka khana khao na.healty rahoge
What I understand is that.
1. For, A big restaurant or a GST registered restaurant who cuts a GST bill there wont be any diff before and after the implementation as the price of the products already has GST included. (It may be possible that these business to invade taxes, include the GST price in the food produce but do not submit taxes as they may not create bills for online orders)
2. For small restaurants who do not come under GST, will have to make their items listed as cost without GST. Swiggy will collect GST for them and pass on to the govt. Remember it is the customer who pays the GST. Business never pays the GST. Its the duty of businesses to collect and pay GST to govt. So, in case of small restaurants the price of food produce will increase.
Toh Abhi tak jo restaurant charges , delivery charges and packing charges dete the, woh kahan jaata hai. 
5% is too lezz. It should be 18% or more.
And put 100% CVD and special cess on Sulabh International.
Sulabh Shauchalay are ..kind of.. in a recession-proof business.
So their customer base would not go down just because of increased cost of service.
I mean come on! Koi bhi.. kitne din rok kar rakh sakta hai? Finally tou jaana hee padega na🚽🚻!
This is the first step to bring cloud kitchen in GST/Tax Gambit.
Once the market matures, It will disallow people to register as restaurants without GST
Yaha ka tax system boht hi khrab hai. Multiple layers of taxes makes the foreign companies not willing establish factories in india. That is why prefer China, Vietnam, Hong-Kong etc. Recently Ford motor is exiting India bcz of horrendous import duties, & tax complications.
They prefer China, Vietnam, Hong-Kong etc becuase they are very skilled and hard working people.
Ford motor closed because of very low sell just 1k-1.5k per month. and Ford will comtinue making engine in India.
Yaha to union bana nahi ki strike suru hojati hai. koi criminal ya kam chor ko easily nahi nikal sakte.
if u click on that taxes and charges – does it show restaurant GST component
Wouldn’t this make some restaurants a bit more expensive ?
Some restaurants would not drop prices after excluding GST as it was included in the cost of food items and swiggy will collect GST on payment page.
This is true, but most restaurants are required to separately show GST in their invoice, there might be *very small number of outlets who include it within price
Please understand that swiggy Zomato does both products and service. They are charging GST on product, but they are not paying the GST for the delivery service being charged. Govt wants put 5% on the delivery service fee of ₹30, so obviously they will increase fee to ₹32 to the customers.
Nicely explained
Government should charge extra 5% gst on gst also.
think bigger, aim higher😉
Input (food) can still be optional, output ..is compulsion.
🦾tax💪🏽 the compulsion… and tax it hard🙃🙂🙃🙂
What would this person say, if someone informed the person of a drop in the prices of contraceptives?
@xuseronline
Swiggy, Zomato to pay 5% GST to govt; food won’t cost more
From January 1, food delivery apps will have to collect and deposit 5 per cent GST with the government, in place of restaurants, for deliveries made by them.
“The tax was payable by restaurants, now instead of restaurants, the tax will be payable by aggregators which will also… prevent revenue leakage,”
Can someone explain how this will be implemented?
Some food items are 5% GST, some 18% and other 0% GST
The best thing is that some food items which are closely linked have different GST rates
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Inko kuch kaam dhanda nai hai kya
Petrol/Diesel ko lau pehele GST me pir ye sb sochna
This is totally unfair for all AAM_AADMIs in India
Now Swiggy/Zomato will have a new reason to hike their prices