In a major clarification, the central government has stated that it has no plans to impose a fresh 5% Goods and Services Tax (GST) without input tax credit on food delivery platforms such as Zomato and Swiggy. Pankaj Chaudhary, Minister of State for Finance, made this announcement in the Rajya Sabha on Tuesday, April 1, 2025, putting an end to speculation about increased taxation on food delivery services.
Current GST Structure on Food Delivery Services
Replying to a query raised by Rajya Sabha member Golla Baburao, Chaudhary explained that GST rates are determined by the GST Council, which comprises representatives from both the central and state governments. Presently, restaurant services-whether availed directly or through online food delivery apps-are taxed at 5% without input tax credit. However, certain restaurants located in special zones may have different tax structures.
GST Council's Stance on New Taxation
The possibility of a separate GST on food delivery services was discussed during the 55th GST Council meeting held on December 21, 2024. Addressing concerns, Chaudhary stated, "The GST Council recommended that the issue needs further examination," meaning no immediate tax changes will be made, and the matter remains under review.
Existing GST on Food Delivery Apps
Apart from restaurant services, food delivery platforms charge consumers for additional services, such as platform fees, which are already subject to 18% GST. Since no new 5% GST is being levied on food delivery services at this time, consumers will not face any added costs when ordering through Zomato, Swiggy, or other similar platforms.
What This Means for Consumers and Businesses
This clarification provides relief to both food delivery platforms and consumers, as a new 5% GST without input tax credit would have increased the cost of ordering food online. While the GST Council continues to examine the issue, no immediate changes are expected in the taxation of food delivery services.
For now, food delivery remains taxed as per existing regulations, ensuring no additional financial burden on consumers. Any future revisions in GST rates will depend on further recommendations from the GST Council.
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