GST Department Examining Restaurants If they have Escaped Taxes on Packaging Charges

The goods and services tax (GST) department is apparently examining restaurants to see if they have escaped the taxes on packaging charges.

According to a report, this happened after the tax department took action to collect GST on charges for food and delivery.

HT.com cannot examine the originality of the information gathered from the report independently.

This happened because several restaurants listed on food apps like Zomato got notices from the tax department in the last few months. They were asked to give details of the GST they paid on packaging charges since January 1, 2022.

The GST on packaging charges that are collected from the customers has left the tax department in question whether the amount has actually reached the state money chest, as per the reports.

The reason behind this is that GST is paid by those who provide services, and they recover it from the customers or from the party enjoying the services.

In this scenario, services providers should submit the tax to the government and should recover it from the customers using online food platforms for purposes of food, delivery, and packaging.

But now there is confusion about who should pay the GST, the restaurant or the online delivery app.

But people have distinct opinions that if the package charges should be written separately on the bill, then it is treated as a separate service. In that case, the restaurant should be the one to pay GST on it, according to an expert.