September 24, 2021

The World Stock Markets Tips & Targets, News, Views & Updates

The World Stock Markets Tips & Targets, News, Views & Updates

Zomato, Swiggy orders may attract GST soon: Here’s how food deliveries could burn a hole in your pocket

New Delhi: The Goods and Service Tax (GST) Council is all set to meet on Friday, September 17, to discuss a slew of important issues such as whether to bring petrol and diesel under the ambit of GST or not. Besides all other matters, the GST Council is also expected to decide whether food orders via app-based online food delivery services such as Zomato and Swiggy will attract additional taxes or not. 

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

The proposal to put additional GST on food orders is also on the agenda of the GST Council which is meeting on Friday this week. GST Council’s Fitment Committee had suggested putting an additional tax on online food orders. 

The committee proposes that there needs to be clarity regarding the taxation on food deliveries. The committee believes that there is an ambiguity over if the doorstep or takeaway services by cloud kitchens or central kitchens come under “restaurant service” or not. 

The Fitment Committee has also put forward two solutions in front of the GST council: either classify e-commerce operators (ECOs) as deemed suppliers or as 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 as such under two categories. The GST rate, in this case, will be 5 per cent without input credit and 18 per cent with input credit from the restaurant to the ECO. Also Read: iPhone 13 launch: Desi netizens go gaga over the use of ‘Dum Maro Dum’ inspired song in launch video

However, if the Council notifies ECOs as aggregators in the upcoming meeting, the tax rate will be fixed later. Also Read: Cabinet approves Rs 26,000 crore PLI scheme to bolster auto sector, local manufacturing

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