Do really cost to consumer will increase on foods delivered by online food delivery operator like Zomato, Swiggy etc.?
Swiggy and Zomato has seek government clarification on how the GST framework will work as its proposed in 45th GST council meeting that 5% GST on all delivery to be charge by the online food delivery operators w.e.f 1st January 2022.
In current scenario 5% GST charged by the restaurant on foods and online food delivery operators only charges GST @ 18% on their service or delivery charges on top of food cost, the food delivery operators seek clarification whether it will be double taxation after its proposed in council meeting that GST to be charge by food delivery operators.
So, whether it really lead to cost burden on customer??? The answer is NO.
Since there is no fresh tax has implemented neither tax rate has been increased so there will not be any extra cost burden to the customers.
The GST Council at its 45th council meeting held on 17th September it has been decided that w.e.f 1st January 2022 the Point of Taxation for collection of taxes should the place where food is delivered, so online food delivery operator will collect and pay 5% GST on all their deliveries. This means the restaurant who charges GST on food they won’t charge any GST instead online food delivery operators will collect and pay GST at same rate applicable for the restaurant.
Since there is no change in taxes it simply shifted liability for collection and payment of GST in hand of online food delivery operator instead of Restaurants, hence price of the foods delivered by food delivery operator under new GST framework will remain same as earlier.