Zomato, Swiggy to collect GST for deliveries. What it means for you
The GST 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. The GST Council, which is headed by the Union finance minister and includes representatives from all states and Union territories, has decided to charge services by cloud kitchens and food delivery platforms a 5 per cent GST as GST 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.
"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," Union finance minister Nirmala Sitharaman said on Friday after the meeting of the or Goods and Services Tax Council.
Revenue secretary Tarun Bajaj said the move will, however, 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 said.
Also read | No GST on petrol for now, says FM
The GST Council also extended concessional tax rates on Covid-19 medicines, cut tax on cancer drugs and waived GST on import of highly expensive medicines for muscular atrophy, but will continue to keep petrol and diesel out of the uniform national tax regime.
"There has been a lot of speculation on whether petroleum products will be brought under the ambit of GST. I make it absolutely clear that this came on today's agenda purely because of the Kerala High Court order where it suggested the matter to be placed before GST Council,” Sitharaman said while briefing the media after the meeting. “GST Council members made it clear they do not want petroleum products to be included under GST. We will report to the Kerala High Court that the matter has been discussed and Council felt it was not the time to bring petroleum products under GST,” she added
Sitharaman announced a reduction in GST rate on biodiesel, which is supplied to oil marketing companies for blending with diesel, to 5 per cent from 12 per cent.