Food Delivery Platforms Swiggy and Zomato to charge additional 5% from customers in 2022
- ByTejika Bajaj | December 31, 2021
The food delivery mega giants Swiggy and Zomato are all set to impose an additional charge of 5% on its customers commencing from January 1st, 2022 under the Goods and Services Tax (GST) Regime. The latest announcement is likely to hamper the discount rates provided by the two food delivery giants as it is still unknown as to whether the charges will be imposed on the base price or the discounted one.
Currently, Zomato and Swiggy collect a tax of 5% on its online platform from customers and transfer the liability of the same to the restaurants or cloud kitchens affiliated with them. However, commencing January 1st, these food delivery apps would be collecting the GST from customers on behalf of the restaurants as well as depositing the same with the tax authorities themselves.
It will therefore become mandatory for restaurants to register themselves with the GST council to continue with the services. This announcement comes at a time when GST evasion has topped charts with more than INR 4000 crore evaded. The new regulations will thus circumvent evasion from the food industry.
While these new provisions would not have any serious repercussions for the customers of these food delivery giants, the new move is likely to impact various small scale businesses significantly. For most chains, the new rules will add more complexity to their operations as they will now have to maintain two separate accounts for business done through Zomato as well as Swiggy.
As for food delivery platforms, this will also add more burden of compliance towards collecting and bookkeeping of taxes on behalf of the restaurants. However, the same would allow ease in collection of GST by the government.
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