The Indian government, through the Ministry of Finance, addressed a question in the Rajya Sabha concerning the imposition of a 5% Goods and Services Tax (GST) on food delivery applications such as Zomato and Swiggy. The response clarified that GST rates and exemptions are determined by the GST Council, a constitutional body comprising representatives from both the central and state/union territory governments. The existing policy dictates that restaurant services, excluding those located in specified premises, are subject to a 5% GST without input tax credit, regardless of whether the service is provided directly by the restaurant or through Electronic Commerce Operators (ECOs). This means the core food service itself already carries a 5% tax. The question specifically raised whether the government planned to impose this 5% GST directly on the delivery apps themselves. During the 55th GST Council meeting held on December 21, 2024, a proposal to clarify the GST rate applicable to food delivery services ordered through these apps was presented. However, the council determined that the matter required further examination. The response also specified that other services provided by food delivery apps, such as platform services, are already subject to an 18% GST.

The query also sought to ascertain the annual financial burden on consumers resulting from the proposed 5% GST. The Minister of State in the Ministry of Finance indicated that this question was not answerable, as the council had not yet finalized the clarification of the 5% GST application on food delivery apps. This implies that the potential financial impact on consumers remains undetermined until the GST Council concludes its review and provides a definitive ruling. The current 5% tax is already applied to the restaurant food service itself. The council is currently only reviewing if the delivery app platform will also be directly taxed at 5%. The clarification regarding the GST implications on food delivery applications is still pending, and the GST council has not provided a timeline for when the issue will be revisited. The current information shows that the tax is on the food service, and the council is evaluating if the app platforms will also be taxed.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO-3446
ANSWERED ON – 01.04.2025

GSTONFOODDELIVERYAPPS

3446. SHRI GOLLA BABURAO:

Will the Minister of FINANCEbe pleased to state:-

(a) whether it is a fact that Government is planning to impose 5 per cent GST without input credit on food delivery apps like Zomato, Swingy etc.; and

(b) if so, the details of quantum of amount of burden on consumers annually?

ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(SHRI PANKAJ CHAUDHARY)

(a) : GST rates and exemptions on all services and goods are prescribed on the recommendations of the GST Council which is a Constitutional body comprising of members from both the Union and State/UT Governments.

GST on restaurant services, other than those located at specified premises, is leviable at 5% without input tax credit whether provided through Electronic Commerce Operators (ECOs) like Zomato, Swingy etc. or provided directly by the restaurants.

A proposal to clarify the applicable rate of GST on services of delivery of food in relation to orders placed on food delivery apps like Zomato, Swingy etc. was placed before the 55th GST Council held on 21st December, 2024. The GST Council recommended that the issue needs further examination.

Other services provided by the food delivery apps like Zomato, Swingy etc., such as platform services, are levied GST at the rate of 18%.

(b): Does notaries in view of (a) above.