GST Council's Decision On Food Delivery Apps Such As Swiggy, Zomato Likely

Currently, food delivery apps are registered as Tax Collectedat Source (TCS).

New Delhi: The Goods and Services Tax (GST) Council may discuss on a proposal to treat online food delivery platforms like Swiggy and Zomato as restaurants and levy 5% of GST on their supplies.

Currently, these food delivery apps are registered as Tax Collected at Source (TCS) under the GST.

A proposal to make the delivery platforms liable to pay the Goods and Services Tax (GST) on restaurant services supplied through them is one of over four-dozen proposals that will be taken up by the Council at its meeting in Lucknow.

If approved by the Council, food delivery apps will have to collect and deposit GST with the government, in place of restaurants, for deliveries made by them.

Analysis of returns filed by delivery apps and the restaurant services in Haryana showed gap in taxable turnover for suppliers where TCS was deducted by a delivery app was greater than the turnover declared by such suppliers. This implied that there was a tax evasion.

The evasion amount could be substantial as food delivery apps mostly have high supply volumes.

Some of the other important proposals include shortfall in GST compensation to states, extending reduced GST rates on essential Covid-19 medicines and discussion on bringing petrol and diesel under the GST.


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