The GST Council has decided to impose 18% GST on the delivery fee charged by food delivery apps like Zomato and Swiggy.
This move will affect the margins and profits of these companies.
To deal with the extra cost, both platforms are considering passing the burden on to customers, which means ordering food online may become more expensive. Earlier, delivery fees were not taxed.
According to a report by Moneycontrol, sources said that both companies are discussing ways to recover the loss in margins, and one option is to increase delivery charges for consumers.
What Zomato and Swiggy Are Planning
Both companies are currently reviewing the government’s notification to understand how the new GST rates will affect their margins, pricing, and working capital.
Legal experts point out that this tax will directly hit food delivery platforms since delivery is their main service.
In contrast, for quick commerce or e-commerce platforms, delivery is treated as an additional service linked to product supply.
Customers who have subscribed to Swiggy One or Zomato Gold will not be directly affected, since these are considered value-added services, not standard delivery fees.
Will Customers Pay More?
The GST Council, in its 56th meeting, clarified that food delivery platforms will now be liable for GST on local delivery services under section 9(5) of the CGST Act.
This decision is meant to clear confusion about tax liability on platform-based services. At the same time, small delivery agents will not come under GST compliance.
A company official mentioned, “We are still waiting for more clarity on this, but if the GST burden on delivery services is higher, it will likely be passed on to customers. The impact may vary across different categories.”
