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Jun, 19 2018

From Swiggy to Foodpanda, online food delivery service firms face GST heat

Food delivery services are taxed at 18% which the restaurants have to pay.

From Swiggy to Foodpanda, online food delivery service firms face GST heat. Online food delivery service companies like Swiggy are facing the heat from restaurants after the goods and services tax (GST) on eating outlets was cut to five per cent, from 18 per cent in November, and input tax credit provision was withdrawn.

A few eateries have begun charging higher costs on online delivery platforms. Others are arranging a commission cut with online sustenance conveyance accomplices to compensate for the 3.5 for every penny extra cost because of inaccessibility of the information assess credit (ITC) office.

Swiggy, Zomato and Foodpanda provide online delivery services to restaurants at acommission of around 20 per cent, which is levied an 18 per cent GST. Unlike earlier, restaurants can no longer claim ITC on the 18 per cent GST for the input services from these delivery platforms. “These online food delivery companies have represented for a rate reduction or to allow ITC to restaurants. The matter is being discussed," said a government official.

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