Earlier this month, the Finance Ministry issued a circular announcing the new rule regarding GST which is to come into effect from January 1, 2022. This would impact the online food delivery platforms, including Swiggy and Zomato. These platforms would be required to collect and pay tax on behalf of restaurants.
“As ‘restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the e-commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022, through ECO,” the circular read.
According to reports, the new move comes as a result of the update issued by the finance ministry under which food aggregators are directed to pay 5% of Goods and Services Tax (GST) for cooked food orders through their platforms.
Notably, the 5% GST requirement will be in addition to the now prevailing 18% GST. The tax will be applied to the price of the food item being delivered to customers via the online food delivery platforms.
“While consumers are likely to see an increase in their e-com food bills from 1st January, it is expected that there would be a significant increase in the compliance load for e-commerce food operators,” NDTV stated quoting MS Mani, Partner, Deloitte India.
