GST on food delivery will not impact consumers, 5% GST on delivery brands from January

It has decided to charge 5 per cent GST on cloud kitchens and food delivery platforms as it is a levy on consumption.
  • Nusra Deputy Features Editor
Food Delivery

"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," said Nirmala Sitharaman, Finance minister on Friday after in GST council meeting held in Lucknow.

The council has decided that online food delivery platforms such as Swiggy and Zomato will collect tax on items from consumers instead of restaurants they pick up orders from for ease of tax administration.

It has decided to charge 5 per cent GST on cloud kitchens and food delivery platforms as it is a levy on consumption.

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.

As per revenue secretary Tarun Bajaj the move will not impact the end consumer.

"There is no extra tax, there is no new tax. The tax was payable by restaurants, now instead of restaurants, the tax will be payable by aggregators which will also... prevent revenue leakage," he shared.

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