Soon, you may have to pay GST on your food order from Zomato, Swiggy

September 16, 2021

The Goods and Service Tax Council may deliberate on including food delivery apps like Zomato and Swiggy within the ambit of restaurant services, a move that will attract GST on your next food order from these food delivery apps.
According to a report in the Economic Times, the GST Council is keen to bring food delivery apps under restaurant services and make them liable to pay the GST. The apex GST body may also include cloud kitchens within the ambit of restaurant services and make them pay 5% GST.
The GST Council could take up the matter for discussion at its meeting Friday, the financial daily reported.
The fitment committee, which comprises officers from various states that makes suggestions on tax rate changes, has recommended that the ecommerce operators supplying restaurant services on their platforms be notified as ecommerce aggregators in the same category as restaurant service, thus making it a supplier that has to pay GST. “ECOs (ecommerce operators) such as Swiggy and Zomato may be made liable to pay GST on restaurant service supplied through them,” the committee said in its recommendations to the GST Council, the publication mentioned citing people privy to the details.
The panel added the Central GST Act would have to be amended to include restaurant services but said restaurants within hotels having tariff of Rs 7,500 per day and upwards may be excluded.

“This change may be given effect from January 1, 2022, so as to allow the ECOs time to make changes to their software etc,” the committee added. Cloud kitchens may also be included under restaurant services and be charged a 5% GST without input tax credit, the fitment committee recommended.
The committee noted that while online food ordering through food delivery apps had increased during the pandemic, the government was not getting proportional revenue from taxes.