Zomato & Swiggy to pay GST but no new tax added, says FM Nirmala Sitharaman

The Goods and Service Tax (GST) Council on Friday decided to levy charges on food delivery operators such as Zomato and Swiggy. Finance Minister Nirmala Sitharam said that 5% GST will be levied at the point where the delivery is made i.e customer. Currently, the food aggregators are registered as TCS (Tax Collected at Sources) and the tax was collected from restaurants.

"Regarding Swiggy-like operators and gig offices, it has been decided that since the place where food is delivered will be the point where tax is collected, the Swiggy-like operator who will be collecting tax will pay up the GST on it," Sitharaman said adding that no new tax has been added.

At present, the restaurants and hotels registered on the food delivery platform pay 5% GST, while aggregators pay 18% on the commission it charges. Revenue Secretary Tarun Bajaj speaking to the media after the all-powerful GST meet said that no new tax has been added and just the GST collection point has been transferred.

Recommendations of 45th GST Council Meeting

The GST council took several key decisions in the Friday meeting. The council, which comprises Finance Minister Nirmala Sitharaman and her state counterparts, decided to extend concessional rates on some novel coronavirus drugs till December 31. It also decided to keep fuels- petrol and diesel- out of the GST purview. "GST Council felt it was not the right time to include petroleum products in GST," Sitharaman said.

The panel decided to charge 18% GST on all sorts of pens. GST rate on bio-diesel for blending in diesel was reduced from 12% to 5%. The Council also recommended new textile and footwear rates from January 1, 2022.

GST Council Meeting: Key Highlights

• Life-saving drugs Viltepso and Zolgensma used in the treatment of Spinal-Muscular Atrophy (SMA) spared from GST when imported for personal use
• Concessional GST on certain COVID drugs extended up to December 31, 2021.
• GST rates on seven other medicines reduced from 12% to 5% till December 31.
• GST rate on  Keytruda medicine for cancer treatment reduced to 5% from 12%.
• GST on vehicles' Retro fitment kits used by specially-abled person reduced to 5%