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Why Zomato and Swiggy food delivery orders may become more expensive from tomorrow?

You may have to pay more starting January 1 if you use Zomato or Swiggy to order meals. This is due of a government’s new order regarding GST.

Food delivery platforms like Swiggy and Zomato, which include cloud kitchens and central kitchens, would be required to pay GST on behalf of their partner restaurants, according to Finance Minister Nirmala Sitharaman.

From tomorrow, January 1, 2022, on, you’ll have to pay a lot more for your Zomato and Swiggy orders. According to government rules released earlier this year, meal orders sent via food delivery services other than Zomato and Swiggy would be subject to a 5 percent goods and services tax (GST) on the restaurant services.

In other words, if you want to save money on food delivery in the next year, you’ll have to learn cook at home.

Key Highlights

  1. Zomato and Swiggy would have to pay the 5% GST directly to the government starting on January 1.

2. Restaurants on these food-ordering platforms currently collect and deposit the GST.

3. Customers should not be required to pay any more charges as the government is not imposing any additional costs.

Food orders from Zomato and Swiggy will become more costly?

Earlier this year, at the 45th meeting of the GST Council, Finance Minister Nirmala Sitharaman announced the decision. This was in the month of September. Sitharaman declared that food delivery platforms such as Swiggy and Zomato, as well as cloud kitchens and central kitchens supplied via the platform, would be required to pay GST on behalf of its restaurant partners, which includes cloud kitchens.

The central government hopes that this step would prevent tax fraud by restaurants, which are required to collect and deposit GST with the government. It should be highlighted that restaurants charge their clients GST on each order made via food delivery apps, but do not submit any taxes to the government, which is contrary to what the law should require.

If you purchase food from a meal delivery service on a regular basis, you should be aware that these platforms charge additional taxes to all clients on each order they place.

According to the national government, The new Goods and Services Tax (GST) legislation transfers the responsibility for tax collection from restaurants to food aggregators such as Swiggy and Zomato. On principle, this should have no effect on clients, but it is probable that these food delivery apps will charge a fee in order to make up for the extra labour that they will be required to do on behalf of restaurants.

Online meal delivery services currently charge an additional 5% GST on top of the 18% GST you already pay to restaurants, for those who are unaware. Although you aren’t paying more to the government, it’s possible that these food aggregators may increase their prices to reflect the new tax system.

Zomato, Swiggy, and any other food delivery apps have not commented on the topic or emphasised anything about collecting additional fees from consumers when the new GST legislation comes into force.

It’s important to remember that the GST law only applies to food services like Swiggy Instamart and Swiggy Genie, not grocery delivery services like those.

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