Zomato, Swiggy get GST Demand Notice for Rs. 750 Crore in unpaid taxes from DGGI

The Directorate General of GST Intelligence (DGGI) has sent Goods and Services Tax (GST) demand notices to food aggregators Zomato and Swiggy.

Zomato and Swiggy have got GST notices totaling Rs. 400 crore and Rs. 350 crore respectively as per report.

DGGI increased the tax demand because it feels that because food delivery is a service, Zomato and Swiggy must pay GST.

On Wednesday, Zomato’s stock closed 1.07 percent down at Rs 15.25 a share.

Customers are charged money by both online meal delivery services in the form of delivery costs. According to Zomato and Swiggy, the ‘delivery charge’ is the expense paid by the delivery partners who walk door to door to bring meals.

Customers just pay that amount, which is then passed on to delivery partners. However, GST authorities disagree on this point.

Swiggy and Zomato were required in 2022 to collect and submit a 5% tax on their orders. Previously, restaurants registered for GST were only responsible for collecting and submitting the tax.

Swiggy raised the platform charge for food orders from Rs. 2 to Rs. 3 last month. The increase in platform fees went into effect on October 4. The platform cost is imposed in addition to the delivery price, which is eliminated for customers who join Swiggy’s loyalty programme, Swiggy One.