GST officials discuss Swiggy, Zomato taxation
State and central government goods and services tax (GST) officials, who constitute the fitment committee, have reviewed whether delivery charges levied by food delivery companies like Swiggy and Zomato should continue to be taxed.
The reason for the review is the Directorate General of GST Intelligence (DGGI) notice of last year questioning the classification of delivery charges. The DGGI argued that delivery charges, when bundled with food supplies, should be treated as part of the food supply and taxed at a higher GST rate of 18 per cent.
The Directorate General of GST Intelligence (DGGI) issued notices to Zomato and Swiggy regarding GST demands for the period between July 2017 and March 2023. Zomato received a Rs 400 crore demand, while Swiggy was asked to pay up Rs 350 crore.
These notices were part of an investigation into the classification of food delivery services and their GST obligations
Under the Central Goods and Services Tax (CGST) Act, 2017, Section 7(1)(a) provides that the supply of goods and services includes all forms of transactions, which could be construed to include food delivery charges as part of the service.
