Swiggy and Zomato to charge extra 5% for food delivery from Jan 2022; Know why

Customers ordering food on food delivery platforms including Zomato and Swiggy will w undergo tax scrutinization as se platforms are all set to charge an additional 5% from customers under Goods and Services Tax regime beginning from January 2022. 

This additional charge is likely to affect coupon discounts provided by Swiggy and Zomato for customers as it is yet to kw wher charge will be added to base price or discounted price. However, as officials said, beginning from January 1, 2022, restaurants will be charging an additional 5% on total cost of food from customers. 

This came under decision taken by GST Council earlier in September. In its decision, Council said that food delivery platforms including Zomato and Swiggy will have to collect tax on items from consumers instead of restaurants from where y pick up orders. This will help in easing tax administration and furr GST deposits will have to be made by customers instead of restaurants for deliveries. 

Union Finance Minister who also heads GST Council after a meeting of Goods and Services Tax Council said that  services by cloud kitchen and food delivery platforms will be charged 5% GST.

new taxes have been implemented for food delivery platforms: Revenue Secretary

Clarifying decision taken by GST Council, Revenue Secretary Tarun Bajaj said that GST collection centre has been merely transferred and new taxes have been anunced for consumers. Adding to it, he said that customers ordering food from  aggregator are supposed to pay tax, however, restaurants are paying those. Finding several instances of restaurants t paying GST, it has been mandated that  aggregators have to collect tax from consumer and furr pay it off to authorities. 

move has been taken in backdrop of several cases of tax evasions found exercised by restaurants bringing a gap in tax turver in food supplies. 

Im: PTI