Overview

• The GST Council clarified that local delivery services routed through electronic commerce operators will attract 18% GST starting September 22 under Section 9(5).
• Platforms such as Zomato and Swiggy will be liable to pay the tax on behalf of delivery partners who are not registered under GST.
• Restaurants using their own delivery networks continue under the 5% restaurant rate, creating a price advantage that could steer customers to order directly from chains like Domino's.
• Food delivery companies are evaluating pass-throughs to consumers or reduced partner payouts, with one executive estimating an annual hit of upwards of Rs 200 crore.
• A Bernstein note says delivery charges were previously untaxed and will now bear 18% GST, while platform fees were already taxed, and it expects QSRs like McDonald's and Domino's to benefit from GST rationalisation on inputs.