Particle.news
Download on the App Store
12 ARTICLES
·
yesterday

GST Council Puts Zomato, Swiggy on the Hook for 18% Tax on Delivery Fees From Sept. 22

The clarification treats the apps as the supplier under Section 9(5), shifting GST on delivery fees to their books.

Image
The GST Council has clarified that local delivery services, currently taxed at 18% with ITC, will continue at the same rate with no change.
Image
Image

Overview

  • At its 56th meeting, the GST Council clarified that local delivery services fall under Section 9(5), making platforms responsible for collecting and remitting 18% GST on delivery fees.
  • Morgan Stanley pegs the per‑order impact at roughly ₹2 for Zomato and ₹2.6 for Swiggy, while annual outgo estimates range from about ₹180–200 crore to as high as ₹400 crore, depending on the source.
  • Executives and reports indicate the companies plan to share the burden between higher customer charges and reduced delivery‑partner payouts, which could trim gig‑worker earnings.
  • Brokerages including JM Financial and Motilal Oswal describe the net effect as manageable, with recent platform‑fee hikes, relatively inelastic demand, and subscription perks cushioning the blow.
  • Quick‑commerce arms like Blinkit and Instamart are seen less affected, as platforms rework billing and compliance systems ahead of the festive season rollout.