Meals are specially ordered from food delivery companies Zomato and Swiggy. But now these companies are going to charge people extra bucks. In the new year, i.e. from January 1, ordering food is going to be expensive now. The companies will start levying GST on food orders from January 1. The Government of India has imposed a 5 per cent Goods and Services Tax (GST) on e-commerce operators (ECOs) distributing food items such as Zomato and Swiggy.
At present restaurants pay this tax, but under the new rules, food delivery ECOs will pay this tax. The Ministry of Finance has introduced new rules regarding online food delivery. It will be implemented from January 1, 2022. Under this, food delivery ECOs will now have to pay 5 per cent GST on food delivery from registered and unregistered restaurants. This ECO will not get Input Tax Credit (ITC) on it.
Currently platforms like Zomato and Swiggy are registered as Tax Collector at Source (TCS). Are able to collect TCS by filing GSTR-8, but it will be closed from 1st January. Food tech companies do not check the GST registration of restaurants for delivering food, leading to government tax losses. According to the government committee on ECO, the loss is around Rs 2,000 crore. The 5 per cent tax on food delivery ECOs like Zomato and Swiggy will not affect consumers, as the government has not increased the tax, but the existing tax will be recovered from these apps instead of restaurants. But it can happen that food delivery apps collect this tax from the customers in one form or another. In this case, ordering food online from January 1 can be expensive.