Food Delivery Under GST Regime; Will It Be Costly Now?

Union Finance Minister Nirmala Sitharaman stated on Friday that online food-delivery businesses such as Zomato and Swiggy will have to pay GST on restaurant services provided through them, and the tax will be levied at the point of delivery.

Instead of restaurants collecting and depositing GST, the government has been working on a proposal to allow meal delivery apps to collect and deposit GST with the government.

As of now, online bills created by food aggregators include a tax component. According to those familiar with these companies' methods, the taxed sum is transferred back to the restaurant partners, who are then expected to pay the government.

If this proposed amendment is approved, the firms will no longer pay the eateries but will instead pay the government directly.

The hitch is that different food items are taxed at different rates. It will be fascinating to watch if the government eliminates all of that to make place for an universal 5% tax on food delivery by these aggregators.