Good news for foodies as the customers will not have to pay extra for getting their food delivered.
Food delivery apps like Swiggy and Zomato from, January 1 will collect five percent Goods and Services Tax (GST) from consumers instead of the restaurant they pick up orders.
Finance Minister Nirmala Sitharaman made the announcement on Friday, 17 September, after the meeting of the GST Council in Lucknow.
From January 1, food delivery apps will have to collect and deposit the GST with the government, in place of restaurants, for deliveries made by them.
“Food delivery operators like Swiggy who collect orders from restaurants and deliver to customers the place where the food is delivered will be the point on which tax will be collected by the gig groups Swiggy and others,” Sitharaman said.
Revenue secretary Tarun Bajaj clarified that the change would not impact customers. He said that there was no new tax being levied, but a simple transfer of the GST collection point.
Bajaj explained that instead of GST being levied on restaurants, who then submit it to the government, the tax would be collected from the consumers and paid to the authorities. The decision was made to prevent revenue leakage by unregistered restaurants. Food delivery aggregators like Zomato and Swiggy do not do a mandatory registration check on food delivery suppliers on their app.
According to estimates, the alleged underreporting by food delivery aggregators has caused the Exchequer a loss of Rs 2,000 crores in the last two years.
The GST Council also made other significant announcements. Sitharaman was firm that petrol and diesel would not be brought under the ambit of GST presently. In other announcements, the GST was waived on import of certain highly expensive medicines for muscular atrophy. The concessional GST rates on drugs used in treating COVID-19 treatment was extended till 31 December.
