Finance minister Nirmala Sitharaman told the reporters at the GST council meeting on friday that food tech companies swiggy and zomato will now have to pay GST. She explained that there will be no additional tax, saying, "The precise matter was examined, and any misunderstandings about whether or not the area where the gigs headquarters is based will be taxed, as well as whether or not the area of services will be taxed, were addressed. The essence of the agreement is that the delivery location will be taxed. Tax will be taken by businesses like swiggy and zomato at the moment where the meal is served."

Previously, the tax was collected by the restaurant proprietors, but now the aggregator will be responsible for it as well. Sitharaman went on to say, "Let's say you get meals from an aggregator, and the restaurant now has to pay taxes. However, we discovered that several establishments were not paying. Instead of the restaurant collecting and paying to the officials, we now say that if you order, the aggregators will take from the customer and pay to the officials."

Because the ministry has previously stated that there would be no new tax, end-users will not be required to pay anything additional. swiggy and zomato will also be recognized as Tax Collectors at Sources under GST as of now. According to sources, this change in the tax system was necessary to combat tax evasion. Restaurants actually pay 5% GST on food costs, while distributors such as swiggy and zomato pay 18% GST on commissions. Food costs will not rise if this new reform is simply a transfer of collecting and payments, but keep in mind that different goods belong to different tax slabs.

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SIBY JEYYA

18/09/2021 12:31 AM