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Food ordering via Swiggy, Zomato to get expensive from January 1; Due to new GST norms
Food ordering via Swiggy, Zomato to get expensive from January 1; Due to new GST norms
The Finance Ministry issued a new rule regarding GST under which food aggregators are asked to pay 5% of Goods and Services Tax (GST) for cooked food orders through their platforms.
Online food ordering services like Zomato and Swiggy are likely to spike prices. As of January 1, the food aggregator services will have to pay five percent of the goods and services tax (GST) for orders of cooked food through their platforms. That means Swiggy and Zomato could end up raising prices on all fulfilling orders.
"As 'restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the e-commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January 2022, through ECO," the circular said. "ECOs will be liable to pay GST on any restaurant service supplied through them including by an unregistered person," it added.
Swiggy, Zomato order prices to get expensive
With the changes in the law, online food services will be responsible for collecting and depositing the GST from all restaurants and hotels that host on their platforms. Therefore, services like Zomato and Swiggy will now need to add the 5 percent GST separately on all orders, in addition to the usual 18 percent GST that these services already charge.
The change in the law will also require small restaurant and food store owners to pay five percent GST for each order they receive through these online platforms. Please note that prices could be reflected even if Swiggy and Zomato users opt for their premium membership plans.
Whoever wants to save money on food after 2022 could take advantage of the various free coupons that these platforms offer customers on special occasions. Plus, the food at those restaurants will continue to be priced at the same old prices, so you could save money by collecting directly from the restaurants.
Five percent of GST has also been implemented for ride-sharing platforms. All platforms carrying passengers in any type of motorized vehicle as of January 1 are subject to paying additional GST. However, if you accept bike and car reservations, there will be no such charges.
