Swiggy, Zomato to pay GST to government: Nirmala Sitharaman

Online food delivery firms Swiggy and Zomato will now be liable to pay good and services tax to the government following a decision taken at the GST Council meet on September 17.

"Yes there was detailed discussion; the place where food is delivered is going to be the point where tax will be collected. They will pay the GST on it," said Nirmala Sitharaman, Minister of Finance said while briefing the media.

"There is no new tax," she added.

The government had been working on a proposal to ask food delivery apps to collect and deposit GST with the government, instead of what is currently done by the restaurants.

This new amendment if implemented will ensure that the companies do not pay this to the restaurants but directly to the government.

Currently the restaurant listed on the food aggregators pay 5% GST on food bill, while the aggregator itself pays 18% GST on the commission it charges the restaurants for providing delivery and marketing services. It it goes the way it is planned, there won't be much difference on the bill paid by an end consumer while ordering food online.

Swiggy and Zomato did not immediately comment. However an industry executive requesting anonymity said that the companies now will just need to come up with a mechanism wherein instead of transferring the tax collected from the customers, they will have to pay it to the government.