Swiggy, Zomato orders to cost more from Jan 1; check by how much your food orders could get expensive

Online food orders from Swiggy and Zomato are all set to be treated on par with restaurant dine-in orders from January 1 2022.

New Delhi: Starting January 1, your online food orders from Swiggy and Zomato are all set to be treated on par with restaurant dine-in orders. This means that customers will have to pay a 5% Goods and Service Tax (GST) on all orders placed on online food delivery platforms. 

Till now, not all restaurants charge taxes on food orders, and that was leading to a loss of revenue for the Indian government. But by enforcing Swiggy, Zomato and other food delivery companies to collect the 5% GST on food orders, the Centre aims to ensure that it doesn’t miss out on any tax revenues. 

The proposal to direct food delivery platforms such as Zomato and Swiggy to collect and pay 5% GST on food orders directly to the exchequer was accepted by the GST Council in its 45th meeting on September 17, 2021. 

“Food delivery apps will now be required to collect 5% GST from consumers instead of the restaurant they pick up orders from,” Finance Minister Nirmala Sitharaman had said in a press conference after the 45th GST Council meeting.

The decision was taken to bring online food deliveries on par with cooked food sold by restaurants. Currently, the tax department levies a 5% GST on cooked food orders sold by restaurants. 

Till now, Zomato and Swiggy used to collect GST on behalf of restaurants from the customers. The collected tax was given to restaurant partners who paid the GST on their own to the government. Also Read: State governments demand extension of GST compensation for another 5 year

But the process had loopholes. As in a few cases, the restaurants don’t pay the GST to the government, which meant a financial loss to the exchequer. Moreover, several restaurants even don't collect GST on the orders. With the move to direct Swiggy and Zomato to collect the taxes, the government will now be aiming to boost its revenues. Also Read: Edible oil prices dropping consistently; better mustard seed crop to soften rates: Food Secretary