financetom
Economy
financetom
/
Economy
/
Food aggregator apps like Zomato, Swiggy to pay GST on restaurant services: FM Nirmala Sitharaman
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Food aggregator apps like Zomato, Swiggy to pay GST on restaurant services: FM Nirmala Sitharaman
Sep 17, 2021 1:24 PM

The Goods and Services Tax (GST) Council has decided that food aggregator apps, which will be collecting the tax at the final point of delivery, will pay the GST on restaurant services, Union Finance Minister Nirmala Sitharaman announced on Friday.

“Since the place where food is delivered will be the point where tax is collected, the Swiggy-like operator who will be collecting tax will pay up the GST on it,” the Finance Minister said as she addressed the media after the 45th GST Council meeting Lucknow.

Five percent GST will be levied at the point where the delivery is made by Swiggy and Zomato-like food aggregators. Revenue Secretary Tarun Bajaj, however, clarified that no new taxes were being announced and that the GST collection point was simply being transferred.

This means that food aggregator apps will collect 5 percent GST from consumers instead of the restaurant they pick up orders from.

The move comes against the backdrop of the proposal of the GST Fitment Committee to the Council to make e-commerce operators (ECOs) liable to pay GST on restaurant service supplied through them.

Bajaj explained that the decision was taken as the analysis of some returns implied tax evasion on the part of some restaurants.

Reacting to the development, Abhishek Jain, Tax Partner, EY, said, "The e-commerce operators like Swiggy, Zomato etc. would need to raise their own invoices and deposit GST to the government even if the actual restaurant supplier is not liable to pay GST due to its turnover being below the threshold limit."

He added that the move might help in increasing GST collections from restaurant supplies by shifting the taxing duty on established business players instead of small restaurants.

Other major decisions taken at the GST Council meet, the first physical meet since the COVID-19 pandemic, include an extension of concessional tax rates on certain COVID-19 drugs by three months till December 31. The Council has also decided to not take petroleum products under the ambit of GST yet.

Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP, said the outcome of the GST Council meeting is more on expected lines without any major surprises.

“Levy of GST on Swiggy and Zomato has been referred to GoM (Group of Ministers), which seems to be the right approach since the same requires careful consideration due to the fact that the decision could impact the employment of a large part of the population,” he added.

(Edited by : Kanishka Sarkar)

First Published:Sept 17, 2021 10:24 PM IST

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
US Dollar Falls Early Wednesday Ahead of Busy Data Schedule
US Dollar Falls Early Wednesday Ahead of Busy Data Schedule
Mar 5, 2025
08:12 AM EST, 03/05/2025 (MT Newswires) -- The US dollar fell against its major trading partners early Wednesday, except for a gain versus the yen, ahead of a busy schedule of economic releases and the Federal Reserve's Beige Book. ADP private payrolls for February are due to be released at 8:15 am ET, followed by the S&P Global services purchasing...
US private payrolls slow sharply in February
US private payrolls slow sharply in February
Mar 5, 2025
WASHINGTON (Reuters) - U.S. private payrolls growth slowed sharply in February, the ADP National Employment Report showed on Wednesday. Private payrolls increased by only 77,000 jobs last month after an upwardly revised 186,000 gain in January. Economists polled by Reuters had forecast private employment rising 140,000 following a previously reported 183,000 advance in January. The ADP report, jointly developed with...
US service sector expands in February; price growth accelerates
US service sector expands in February; price growth accelerates
Mar 5, 2025
WASHINGTON (Reuters) - U.S. services sector growth unexpectedly picked up in February and prices for inputs increased, which combined with a recent surge in the cost of raw materials at factories suggested that inflation could heat up in the months ahead. Rising price pressures could be worsened by a trade war, triggered by President Donald Trump's new 25% tariffs on...
Private Employment Rises By 77,000 In February, Well Below 144,000 Forecast: 'Hiring Hesitancy Among Employers'
Private Employment Rises By 77,000 In February, Well Below 144,000 Forecast: 'Hiring Hesitancy Among Employers'
Mar 5, 2025
Private employers created 77,000 new jobs in February, the smallest number in seven months and well below forecasts of 140,000. The ADP National Employment Report, released Wednesday by Automatic Data Processing Inc., showed a significant slowdown in hiring ahead of Friday’s non-farm payrolls report from the Bureau of Labor Statistics. Economists expect the government report to show 160,000 new jobs....
Copyright 2023-2025 - www.financetom.com All Rights Reserved