The Goods and Services Tax Council (GST) may decide to incorporate food delivery apps such as Zomato and Swiggy within the ambit of restaurant services, a step that will draw GST to your next food order from these apps.
The Council is expected to include food delivery apps as restaurant services. This will enable food tech apps Zomato and Swiggy, among others, liable to pay GST on restaurant services they offer.
As per reports, Cloud Kitchen may also be imposed with around 5% GST. The proposal is expected to be discussed in the 45th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman.
Although GST may be charged to food delivery players, the newly made changes will come into effect only from January 1, 2022, giving players time to make changes to their software and comply with the new regulations.
The fitment committee estimates GST losses at INR 2,000 Crore in FY19-20 and 2020-21, recommending food aggregators be counted as e-commerce operators and pay GST on behalf of the concerned restaurants.
According to Research & Market, India’s online food delivery market is valued at $4.66 Bn by 2020 and is expected to grow to $21.41 Bn by 2026. Not only Zomato and Swiggy but there are several other food delivery applications like Domino’s and Faasos, among others.
The Cloud Kitchen’s market is also estimated to see a sharp growth. The market, which includes players such as Curefoods, Charcoaleats, Food Darzee, Healthie, Behrouz Biryani, Box8, among others, is expected to be valued at $1.05 Bn by 2023.