{"id":58499,"date":"2025-01-21T15:46:16","date_gmt":"2025-01-21T10:16:16","guid":{"rendered":"https:\/\/piceapp.com\/blogs\/?p=58499"},"modified":"2025-01-21T15:46:21","modified_gmt":"2025-01-21T10:16:21","slug":"impact-of-gst-on-food-delivery-startups-swiggy-zomato-others","status":"publish","type":"post","link":"https:\/\/piceapp.com\/blogs\/impact-of-gst-on-food-delivery-startups-swiggy-zomato-others\/","title":{"rendered":"Impact of GST on Food Delivery Startups Swiggy, Zomato & Others"},"content":{"rendered":"\n
Just think about the last time you ordered a meal from your favorite restaurant\u2014the expansion of food delivery startups is no longer a secret. One can notice delivery boys in red or orange attire waiting at the doors of restaurants, which illustrates the market change. However, is this rapid change all caused by immediate deliveries?<\/p>\n\n\n\n
As per a GSTN advisory dated July 20, 2022, e-commerce operators<\/a> (ECOs) like Zomato and Swiggy are now required to pay GST on food delivery services at 5% without input tax credit (ITC), replacing the earlier system where restaurants handled GST payments. This blog explores how these GST changes affect the food delivery ecosystem.<\/p>\n\n\n\n Lately, there has been much attention on the eating establishments where the GST rates were cut. The pre-set GST of 18% was reduced to 5%. While these savings can be attributed to government initiatives, <\/a>the ITC for these services was also eliminated at the same time. <\/p>\n\n\n\n ITC makes it possible for companies or organisations to credit the tax paid on the acquisition of goods or services against future tax obligations. Consequently, most restaurants have raised the cost of some of the foods they offer on food delivery platforms such as Swiggy, Zomato,<\/a> and Foodpanda, among others, while others have decided to slash down the commissions paid to these platforms.<\/p>\n\n\n\n The following are the impacts of ITC withdrawal and reduction in tax rates:<\/p>\n\n\n\nReduction in Goods and Services Tax (GST) Rates and <\/strong>Input Tax Credit<\/strong> (ITC) Withdrawal<\/strong><\/h2>\n\n\n\n

Impact of ITC Withdrawal and <\/strong>Tax Rate<\/strong> Reductions<\/strong><\/h2>\n\n\n\n