GST Applied on Restaurant Services and Food Delivery Apps; Questions Raised in Rajya Sabha

The Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary) has responded to a question raised in the Rajya Sabha (the upper house of India’s Parliament) by Shri Golla Baburao regarding the Goods and Services Tax (GST) on food delivery apps such as Zomato and Swiggy. Below are listed the questions raised in Rajya Sabha:

• (a) Whether it is a fact that the Government is planning to impose 5 per cent GST without input credit on food delivery apps like Zomato, Swiggy, etc.; and
• (b) If so, what are the details of the quantum of the amount of the burden on consumers annually?

Let’s break down the answer provided by the Minister of State in the Ministry of Finance (Shri Pankaj Chaudhary).

(a) GST rates and exemptions for all goods and services are decided based on the suggestions of the GST Council, which is a constitutional body made up of members from both the central and state/union territory governments.

The GST on restaurant services, except those in special locations, is charged at 5% without allowing input tax credit. This applies whether the service is provided through food delivery apps like Zomato or Swiggy or directly by the restaurant.

A suggestion to clarify the GST rate on food delivery services from apps like Zomato and Swiggy was discussed at the 55th GST Council meeting on December 21, 2024. The GST Council decided that more study is needed on the issue.

Other services provided by food delivery apps like Zomato and Swiggy, such as platform services, are charged a GST of 18%.

(b) The quantum amount of the burden on consumers annually due to the implementation of the 5% GST. The burden does not arise because the GST rate clarification is still under examination (as mentioned in part (a)).