New Delhi: Swiggy and Zomato will have to pay five per cent goods and services tax starting Saturday (January 1) as the changes to GST rules will come into effect. These changes are based on the decision taken at the 45th GST council meeting on September 17, 2021, to crack down on restaurants that don’t pay taxes.
With the new rules, food delivery platforms are expected to pay 5% GST on restaurant services that they provide. Previously, the restaurants themselves collected and deposited the tax to the government, but now the delivery platforms will be responsible for paying them to the taxmen.
This is being done as the government found that several restaurants listed on the food delivery platforms were evading taxes, even though they were being collected from the customers.
“As ‘restaurant service’ has been notified under section 9(5) of the CGST Act, 2017, the electronics commerce oprator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022,” a circular from the finance ministry said.
“Accordingly, the ECOs will no longer be required to collect TCS and file GSTR 8 in respect of restaurant services on which it pays tax in terms of section 9(5),” it added.
The finance ministry has clarified that the customers who avail the services of these platforms will not be paying any new tax. The 5% GST would only be deposited through a different route to the government.