Big GST decision for cloud kitchens, food delivery platforms like Zomato and Swiggy but no extra tax burden on end consumer

In a major development, the GST Council, headed by the union finance minister and includes representatives from all states and UTs, on Friday in its 45th meeting took a big decision to charge services by cloud kitchens and food delivery platforms like Zomato and Swiggy a 5 per cent GST.

What it means is that from January 1, food delivery apps will have to collect and deposit 5 per cent GST with the government, in place of restaurants, for deliveries made by them. 

Noteworthy, there would be no extra tax burden on the end consumer.

"Food delivery operators like Swiggy who collect orders from restaurants and deliver (to customers)... The place where the food is delivered will be the point on which tax will be collected by the gig groups Swiggy and others," Union Finance Minister Nirmala Sitharaman said.

Commenting on the decision, Revenue Secretary Tarun Bajaj added, "There is no extra tax, there is no new tax."

"The tax was payable by restaurants, now instead of restaurants, the tax will be payable by aggregators which will also... Prevent revenue leakage," he said.