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.
This article was first published on livemint.com.