Online food-delivery firms Swiggy, Zomato to pay GST to Centre, says Indian FM

Photo: Pixabay

The all-powerful GST Council today decided to charge online food-delivery operators such as Zomato and Swiggy a tax even as it extended concessional tax rates on certain coronavirus drugs by three months till 31 December.

FM Nirmala Sitharaman said 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, the Union Finance Minister said.

Earlier, tax was paid by restaurants but now aggregators such as Zomato and Swiggy will pay the tax, the GST Council decided. This move would help protect revenue, she said.

Currently, these apps are registered as TCS, or Tax Collected at Source, in GST records.

‘No new taxes announced’

Post the GST meeting, Revenue Secretary Tarun Bajaj said that no new taxes were being announced, and that the GST collection point was simply being transferred.

“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…” the Revenue Secretary said.

“There is no new tax…” Bajaj further said.

The 45th meeting of the GST Council on Friday, chaired by FM Sitharaman and comprising state finance ministers, in Lucknow took up the matter.

This article was first published on livemint.com.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.