Are you planning to order food from Zomato and Swiggy on Saturday (January 1st, 2021), then you need to pay more. Yes, you read that right as all orders from Zomato and Swiggy orders are going to be costlier as apps have to pay 5 percent GST on their services.
For the unaware, Finance Minister Nirmala Sitharaman in September, this year announced changes in the tax regime for all food apps. She said that food ordering platforms should pay the tax on behalfs of their restaurants.
“Regarding Swiggy-like operators and gig offices, it has been decided that since the place where food is delivered will be the point where tax is collected, the Swiggy-like operator who will be collecting tax will pay up the GST on it,” Sitharaman said.
Why Government Wants Platforms To Pay 5% GST?
The main reason behind introducing 5 percent GST is to curb tax evasions by restaurants. It is worth noting that restaurants are charging their customers GST on the food that has been ordered via these platforms, but not paying taxes to the government, which is this tax has been imposed on food aggregators.
But, if you are ordering food from these food apps, then you should be aware that these apps pay extra taxes to all customers on the orders. Under this new regime, the government wants to collect taxes from food aggregators like Zomato and Swiggy.
This also means that this should not affect or impact the pockets of the customers; however, there are chances that these apps might introduce some fee on the extra work or increase the delivery charges. It should be noted that these apps are already charging 5 percent extra GST on the 18 percent of GST, which you are already paying to the restaurants.
Zomato And Swiggy Comments On The New Rule
It is important to note that both applications have not commented or issued any statement on new taxes. But we believe that they might come up with new taxes to ease their burden. Furthermore, you should be aware, that the GST rules are only on food services and not on the grocery that has been offered by these applications.