Ordering food on Swiggy and Zomato can be expensive

Ordering food from platforms like Swiggy and Zomato can quickly become expensive. These food aggregators have been directed to pay five percent GST on behalf of all restaurants on cooked food ordered through their platforms. This rule will come into effect from the new year i.e. January 1, 2022. Experts believe that this update of the Finance Ministry will impact both consumers and small restaurants. The GST Council, in its 45th meeting in September, had recommended food delivery platforms including Swiggy and Zomato to pay GST on behalf of the restaurants on their boards. Earlier this month, the Finance Ministry issued a circular stating that the new rule will come into effect from January 1.

This Update Of under Food aggregators will have to collect and deposit GST from all the restaurants on their platform. This means that food aggregators will have to maintain a separate GST entry for every order received from restaurants. To comply with this system, these platforms will need additional resources, which will increase their costs. The thing to note is that the five percent GST will be on top of the existing 18 percent GST.

On this matter, Deloitte India partner S. Mani said consumers may see an increase in their e-com food bills from January 1. The compliance load of e-commerce food operators is also expected to increase.

Due to this change, small restaurant owners and food shops will have to pay five percent GST on all orders received from online platforms. This may affect their earnings. Because of this, they can charge more for orders placed through Swiggy and Zomato apps. This will have a direct impact on consumers.

Tax expert told Tech News by Careers Ready that small restaurant owners who come under the ambit of GST, have an annual revenue of less than Rs 40,00,000. They do not need to pay GST in normal scenario.

Some stakeholders consider this positive and see it as a good step for competition. Government officials also claimed that this change will definitely help to some extent in curbing tax evasion.

On this change, Sarabjit Singh, owner of Pizza Corner Sizzlin Slices, said that this will affect small players in the market. Their customer base will be affected. Gautam Kumar, a street sandwich shop owner from Delhi, who started selling through Swiggy during the lockdown, said that we are already facing difficulties. With the relaxation in rules, people have started turning to big restaurants. Swiggy and Zomato have not commented on this matter.