No Imposition of 5% GST w/o ITC on Food Delivery Apps like Zomato & Swiggy: MoS for Finance Clarifies
The matter of imposing a separate GST rate specifically on food delivery services was discussed in the 55th GST Council meeting held on December 21, 2024
The central government has clarified that it is not imposing a new 5% Goods and Services Tax (GST) without input tax credit (ITC) on food delivery platforms such as Zomato and Swiggy. This statement was made by Pankaj Chaudhary, Minister of State (MoS) for Finance, in the Rajya Sabha in response to a query raised by Member of Parliament (MP) Golla Baburao. Read More: Swiggy Receives...
The central government has clarified that it is not imposing a new 5% Goods and Services Tax (GST) without input tax credit (ITC) on food delivery platforms such as Zomato and Swiggy. This statement was made by Pankaj Chaudhary, Minister of State (MoS) for Finance, in the Rajya Sabha in response to a query raised by Member of Parliament (MP) Golla Baburao.
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Responding to Baburao’s question on whether the government was planning to impose a fresh 5% GST without ITC on food delivery platforms, Chaudhary explained that all GST rates and exemptions are determined by the GST Council. This constitutional body, comprising representatives from both the central and state governments, decides taxation policies for various sectors.
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Minister Chaudhary further clarified that at present, restaurant services, whether accessed directly or through Electronic Commerce Operators (ECOs) like Zomato and Swiggy, attract a 5% GST rate without ITC. The same rate of tax shall be applicable to food ordered via these online delivery platforms, unless the restaurant is in a specified location with different tax policies.
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Previously, the 55th GST Council meeting held on December 21, 2024 had discussed the need for greater clarity regarding the tax treatment of food delivery platforms. However, the council concluded that further examination was required before making any decisions and no new taxation methods were introduced with the matter remaining under review.
Read More: 55th GST Council Extends Concessional 5% GST Rate for Inputs used in Food Preparation
The Minister of State for Finance further reiterated that the current tax rate of 18% GST on other services such as platform services will continue to subsist.
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This clarification provides relief to both food delivery platforms and their users, as the imposition of a new 5% GST without ITC would have likely increased food delivery costs. Consumers can continue using platforms like Zomato and Swiggy under the existing tax structure without any additional financial impact. Any future revisions to GST on food delivery services shall be subject to further discussions and recommendations by the GST Council.
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