Food Delivery Apps Liable to Pay GST on Restaurant Services

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The GST Council endorsed a proposal on Friday that platforms for public food supplies such as Swiggy and Zomato should collect 5% GST after getting GST Registration. The pandemic gave a boon for food supply platforms after the first lock-down and delivery of restaurants with aggregate orders such as Swiggy and Zomato up 120% of pre-covid levels at year-end. It has also resulted in higher deliveries in restaurants. In this article, we’ll learn about GST on restaurant services.

There are several proposals to make the delivery platform responsible for GST Return Filing will be considered during their meeting in Lucknow on 17 September (GST).

According to statistics, over the last two years, the tax loss to be paid by food supply aggregators due to suspected underreports was 2,000 crore total. These applications are officially enrolled as Tax Collectors at Source (TCS). Thus, the new decision of Food Delivery Apps Liable to Pay GST on Restaurant Services will have a significant impact on these apps. In this article, we will discuss the latest update of GST on Restaurant Services.

Reasons why Government made Food Delivery Apps Liable to Pay GST and have GST Registration 

  • This plan was drafted because Swiggy / Zomato did not have an obligatory GST registration, so unregistered eateries were avoiding GST payment on food deliveries.
  • FM Sitharaman has now stated that consumers who paid a 5% food supply fee to restaurants will now pay Zomato and Swiggy. Thus, it will help the government to prevent revenue leakages.
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Learn More about GST Registration for Restaurants at – GST Registration for Restaurants in India 

Revenue Secretary Clarifies GST on Restaurant Services

Revenue Secretary Tarun Bajaj stated this decision does not declare any new levies and is only to shift the GST collecting place. Revenue Secretary Tarun Bajaj has said unequivocally that the change would have no effect on end-users and that they will not be required to pay any additional taxes.

He clarifies GST on Restaurant Services by giving an example i.e. If you order food from the aggregator, the restaurant now pays taxes. But we found that certain eateries didn’t pay. We are now stating that if you order, the aggregator will collect from the customer and pay the authorities, rather than the restaurant,” Bajaj stated.

“Another thing that is done to allow restaurants to continue to charge GST is to classify the food aggregator as a merchant (and consumer). “It will be the same as getting tax from the food aggregator,” he added.

No GST on BPO & Call Center Services

If you want any other guidance relating to the GST Registration, please feel free to talk to our business advisors at 8881-069-069.

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