New Delhi: From January 1, your online food order from Swiggy and Zomato will be treated at par with restaurant dine-in order. This means that customers will have to pay 5% Goods and Service Tax (GST) on all orders placed on the online food delivery platform.
Till now, not all restaurants used to tax food orders, and this was causing revenue loss to the Indian government. But by asking Swiggy, Zomato and other food delivery companies to collect 5% GST on food orders, the Center aims to ensure that it does not miss out on any tax revenue.
The proposal for food delivery platforms like Zomato and Swiggy to collect and pay 5% GST on food orders directly to the exchequer was accepted by the GST Council in its 45th meeting on September 17, 2021.
“The food delivery app will now be required to charge 5% GST from consumers and not the restaurant from which they take orders,” Finance Minister Nirmala Sitharaman had said in a press conference after the 45th GST Council meeting.
The decision was taken to bring online food delivery along with the cooked food sold by the restaurants. Currently, the tax department levies 5% GST on orders for cooked food sold by restaurants.
Till now Zomato and Swiggy used to collect GST from the customers on behalf of restaurants. The collected tax was passed on to the restaurant partners who had themselves paid GST to the government. Read also: State governments demand to increase GST compensation for another 5 years
But there were flaws in this process. As in some cases, restaurants do not pay GST to the government, which means there is a financial loss to the exchequer. Also, many restaurants do not charge GST on orders. With the move to direct Swiggy and Zomato to collect taxes, the government will now aim to boost their revenue. Read also: Consistent fall in the prices of edible oil; Better mustard crop to reduce rates: Food Secretary
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