The GST Council today voted to levy a tax on online food-delivery services like Zomato and Swiggy, while also extending the concessional tax rates on some coronavirus medications for another three months, till December 31.
According to FM Nirmala Sitharaman, Food delivery platforms will now pay GST on restaurant services provided through them; and the tax will be levied at the moment of delivery. Swiggy and Zomato will bear a 5% GST at the point of delivery, according to the Union Finance Minister.
Previously, restaurants were responsible for paying the tax. However, the GST Council has decided that henceforth aggregators like Zomato and Swiggy will bear the tax. She claimed that this step will help in revenue protection. These apps are currently registered as TCS (Tax Collected at Source) in GST records.
Is there any new taxes announcement?
Following the GST meeting, Revenue Secretary Tarun Bajaj stated that no new taxes will be imposed. Furthermore, only the GST collection location would merely be relocated. “Let’s say you order meals from the aggregator, and currently the restaurant is paying taxes. However, we discovered that several restaurants were not paying. We are now stating that if you place an order, the aggregator will collect from the customer and pay the authorities rather than the restaurant “According to the Revenue Secretary.
Bajaj went on to say, “There is no new tax…”.
Among the major issues, the panel discussed the topic at the 45th meeting of the GST Council in Lucknow on Friday. The meeting was helmed by FM Sitharaman and attended by state finance ministers. Finance Minister Nirmala Sitharaman and her state colleagues agreed to extend concessionary pricing on some new coronavirus medications till December 31. It also voted to exempt fuels, such as gasoline and diesel, from the GST. “The GST Council did not believe it was the right moment to include petroleum items in GST,” Sitharaman explained.
The panel decides to levy an 18% GST on all types of pens. The GST rate on biodiesel for use in diesel blends clipped from 12 percent to 5%. From January 1, 2022, the Council also recommend new textile and footwear tariffs. For more such updates, keep watching this space!