New Delhi: Online food aggregators Swiggy and Zomato will be depositing 5% Goods and Service tax collected from customers directly with the government. Earlier, the tax on food was deposited with restaurants, who were supposed to pay it to the government.
The decision was taken at the Goods and Service Tax Council meeting that took place in Lucknow on Friday – the first meeting in 20 months.
Union Finance Minister Nirmala Sitharaman clarified that the customers would not be charged a new tax.
“Yes there was detailed discussion [at the meeting],” said Nirmala Sitharaman according to Moneycontrol. “The place where food is delivered is going to be the point where tax will be collected. They will pay the GST on it. There is no new tax.”
Currently three apps are registered as TCS or Tax Collected at source, according to GST records.
Talking to the media, Revenue Secretary Tarun Bajaj said that no new taxes were being announced and GST collection point was simply being transferred.
Earlier, tax was paid by restaurants but now aggregators such as Zomato and Swiggy will pay the tax, the GST Council decided. This move is also expected to help protect revenue.