The 45th GST Council Meeting, headed by Union Finance Minister Nirmala Sitharaman was held in Lucknow at Hotel Taj on Friday, September 17. According to finance ministry, not restaurants but Swiggy, Zomato to pay GST to government. Food delivery apps like Zomato and Swiggy will have to deposit a GST of 5%. Nirmala Sitharaman, finance Minister, said, “The rule has been decided upon to stop revenue leakages that were happening under the current structure as many restaurants were avoiding GST payment on food deliveries. The place where the food is delivered will be the point where tax will be collected by services like Swiggy and Zomato. Technically, this means consumers who were paying the 5 per cent tax on food delivery to restaurants will now pay it to Zomato and Swiggy.”
Post the 45th GST meeting, Revenue Secretary Tarun Bajaj explained that this decision will not impact consumers, they will not have to pay extra for the food they order. “Suppose you order food from the aggregator, now the restaurant is paying taxes. But we found some restaurants were not paying. We are now saying that if you order, the aggregator will collect from the consumer and pay to the authorities instead of the restaurant doing this.” He further added, “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.”
On Friday, Union finance minister Nirmala Sitharaman, said, “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.” She further added, “The food delivery platforms will have to pay GST on restaurant service supplied through them and the tax will be charged at point of delivery. A 5% GST will be levied at the point where the delivery is made by Swiggy and Zomato.”
GST collection point has been transferred, earlier restaurants used to pay tax but now food delivery sites such as Swiggy and Zomato will have to collect and deposit the tax to government. FM Nirmala Sitharaman, this move would help protect revenue. Now a tax of 5% will be imposed on the delivery made by Swiggy and Zomato.
This was the first time after pandemic that physical meeting took place. Last time physical meeting was held on December 18, 2019, before the pandemic. Now this was the first time after COVID that the physical meeting was held.
The GST council on Friday discussed various issues including imposing GST on Swiggy and Zomato, fuels under GST, Concession on Medicines and Compensation to States. Finance Minister, Nirmala Sitharaman, said, “E-commerce operators Swiggy and Zomato to pay GST on restaurant service supplied through them, and tax to be charged at point of delivery.”