NEW DELHI: A proposal have been approved in the 45th Goods and Service Tax (GST) Council on Friday in which food delivery platforms like Zomato and Swiggy have to pay 5% GST on food orders directly to the exchequer.
According to reports the delivery platform used to collect the GST from the customers and gave it to the restaurants now the tax department has levies 5% GST on cooked food sold by restaurants which they had to pay to the government. The tax department has noticed that the process is confusing and even led to the evasion of taxes by restaurants.
So, to bring clarity in taxation, the GST Council has now decided that food delivery companies will only collect and pay the 5% GST on food orders directly to the government.
"Food delivery apps will now be required to collect 5% GST from consumers instead of the restaurant they pick up orders from," Finance Minister Nirmala Sitharaman said in a press conference after the Council meeting.
However, food bill will not going to increase as you were anyways paying the 5% GST on food orders, along with an 18% GST on the food delivery service.
The food delivery platforms will now have to start collecting and paying 5% GST on food orders starting from January 1, 2022.
It may be mentioned that a survey report published in December last year had said Zomato and Swiggy are leading the food delivery race in India, yet many prefer ordering directly through quick-service restaurant (QSR) mobile apps — such as McDonald's, KFC, Burger King and more. According to the survey conducted by Market research company YouGov, a majority of urban Indians have downloaded their favourite QSR's app, and many claim their order frequency has increased since then.