Exclusive | GST Council may cut tax on online food delivery charges to 5%: Sources
The 55th GST Council meeting, scheduled for December 21 in Jaisalmer, Rajasthan, could bring relief for consumers ordering food through e-commerce platforms by potentially reducing goods and services tax (GST) on delivery charges.
If the Council approves the recommendations made by the GST Council nominated fitment committee, “the 18% GST rate that we pay on delivery charges while ordering food via e-commerce platforms is likely to be brought down to 5%,” according to sources.
“The proposal will be applicable from January 1, 2022, retrospectively, and for business purposes—specifically for e-commerce operators—this reduced rate will, however, not allow them to take the benefit of input tax credit (ITC) when they file their GST returns,” sources added.
The proposal has been thoroughly examined by the GST Council’s fitment committee and aligns with the long-standing demand from e-commerce platforms in the food delivery sector to treat their services on par with restaurant services, sources noted.
GST notices to Zomato
However, does this mean that the recent GST notices sent to operators like Zomato—where CGST authorities in Thane, Maharashtra, claimed Rs.803 crore—will now be resolved?
