Food aggregators Zomato, Swiggy to collect 5% GST from Jan 1

Bengaluru, 1 January Starting from January 1 2022, food aggregators Swiggy and Zomato will have to collect and deposit Goods and Services tax (GST) at 5 per cent rate.

Earlier, restaurants registered under GST were liable to collect the tax and deposit it with the government.

"As 'restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the electronics commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022," a circular from the finance ministry said.

This move is expected to widen the tax base as all restaurants have to pay GST even if not covered under this tax net at the time of supplying food through these online platforms.

In several instances, the government has found out that several restaurants listed on the food delivery platforms were not depositing GST, even though they were being collected from the customer. The collection of GST through the food delivery aggregators is likely to solve this issue with efficient collection and subsequent deposits with the government.

Similarly, cab aggregators like Ola and Uber will also have to collect 5 per cent GST for booking two and three-wheeler vehicles effective January 1.

So, auto rickshaw rides booked through app aggregators like Ola and Uber will become more expensive from the new year.