21-September-2021
Taxation
 
Swiggy, Zomato, cloud kitchens may be brought under GST ambit
15-Sep-2021

Food delivery apps like Swiggy and Zomato may soon be brought under the ambit of restaurant services, which will make them liable to pay the Goods and Services Tax (GST). The GST Council will consider this in a meeting on Friday. The fitment panel has recommended that e-commerce operators that provide restaurant services on their apps or websites must be notified as ‘e-commerce aggregators’ in the same category as restaurant services, making them suppliers and thus, liable to pay GST. Presently, restaurants 5 per cent GST (without input tax credit) on delivery of food items and non-alcoholic beverages. Food aggregators are registered as tax collectors at source. If this proposal goes through, GST for food delivery apps will be brought to the same level as restaurants. It stated that the level of tax evasion in India went up with a rise in food delivery, especially from unregistered entities. Many restaurants are not paying GST and some small eateries are not even registered. Therefore, the panel suggested making the restaurants pay on behalf of the eateries. The panel estimated GST losses of nearly Rs 2,000 crore in FY20 and FY21even though food delivery skyrocketed during the pandemic. “There are no mandatory registration checks by Swiggy or Zomato and there are unregistered restaurants supplying through these food delivery portals,” a government official told Business

News Source:- https://www.deccanherald.com/business/swiggy-zomato-cloud-kitchens-may-be-brought-under-gst-ambit-1030553.html