Food delivery services may face higher GST
Food delivery services are likely to get expensive as the GST Council will discuss the proposal to consider food delivery apps such as Swiggy and Zomato as restaurant services. According to sources in the finance ministry, the fitment committee has proposed that all e-commerce companies who are engaged in food delivery like Swiggy, Zomato, FoodPanda should be treated as restaurant services and taxed accordingly, by bringing them under Section 9 (5) of the CGST Act.
Currently, the GST is paid by the restaurants and not by the delivery apps. The proposal is likely to be discussed in the upcoming GST Council meeting to be held in Lucknow on September 17 and will be subject to the approval of the council. The 45th GST Council meeting, to be chaired by Finance Minister Nirmala Sitharaman, will discuss the extension of compensation cess beyond five years, as demanded by some of the states, given the aftershocks of Covid-19. States are demanding compensation beyond the promised deadline of June 22, citing Covid shock. But, the Centre is reluctant to do so.
