Retrospective 5% GST likely on food app delivery charge
NEW DELHI: Amid its focus on health and term insurance, the GST Council, which will meet on Saturday, is expected to clarify that a 5% levy on delivery charges by apps such as Zomato and Swiggy will apply retrospectively from 2022, and also state that tax has to be paid by builders on charges paid for 'floor space index', including additional FSI, to local authorities.
The fitment committee, comprising top officers, has backed the two moves with the proposal on food delivery apps likely to create a liability as it will not be possible for the players to collect taxes on past transactions.
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Although the proposal is to impose 5% GST without input tax credit on food delivery apps, going forward, it will not result in a significant burden on consumers as the delivery charges are a fraction of the cost of orders. The move has been necessitated by a tax demand of around Rs 750 crore on delivery apps, where GST authorities have taken a view that 18% levy should be imposed.
