New Year 2022: Online Food Ordering To Get Costlier Due To Extra GST From January 1

Ordering delicious food from online food ordering platforms like Zomato, Swiggy could become more expensive soon as they would now have to collect and pay tax on behalf of all restaurants starting January 1, 2022.

Reuters

Also Read:?Uber Eats Delivered Food In Space For Astronauts On International Space Station

This move is a result of the update issued by the finance ministry where it has asked food aggregators to pay five percent of GST (Goods and Services Tax) for cooked food ordered on its platform.?

The new notification is not only expected to impact the consumers, but also smaller restaurants as well as the delivery service platform as they're now expected to have an additional compliance load due to change in the tax regime.?

The circular said in a statement, “As ‘restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the e-commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022, through ECO.”?

The update makes food aggregators liable for collecting and depositing GST from all restaurants on their platforms, where they’d be asked to maintain a separate GST entry for those restaurants.?

Also Read:?Zomato Will Pay You Rs 3 Lakh Reward, If You Find A Security Hole In Their App

The five percent GST that’s going to be levied would be over the existing 18 percent that the platforms are already expected to pay for offering delivery services through their platform. The five percent tax would be applied to the price of the food items that platforms are delivering to customers.?

Reuters

Also Read:?Food Containers Made Of Seaweed Aim To Replace Plastic And Reduce Pollution

Even the restaurateurs would be forced to pay the five percent GST for all the orders that they get via these online platforms. This would either force them to increase their pricing or even force some small businesses to quit selling on the platform entirely.

MS Mani, Partner, at Deloitte India, in a conversation with Gadgets360, said, “While consumers are likely to see an increase in their e-com food bills from 1st January, it is expected that there would be a significant increase in the compliance load for e-commerce food operators.”

Keep reading?Indiatimes.com?for the latest?science and technology?news.??