NEW DELHI: Food delivery services are likely to get expensive as the GST Council will discuss the proposal to consider food delivery apps such as Swiggy and Zomato as restaurant services. According to sources in the finance ministry, the fitment committee has proposed that all e-commerce companies who are engaged in food delivery like Swiggy, Zomato, FoodPanda should be treated as restaurant services and taxed accordingly, by bringing them under Section 9 (5) of the CGST Act.
Currently, the GST is paid by the restaurants and not by the delivery apps. The proposal is likely to be discussed in the upcoming GST Council meeting to be held in Lucknow on September 17, and will be subject to approval of the council. The 45th GST Council meeting, to be chaired by Finance Minister Nirmala Sitharaman, will discuss the extension of compensation cess beyond five years, as demanded by some of the states, given the aftershocks of Covid-19. States are demanding compensation beyond the promised deadline of June 22, citing Covid shock. But, the Centre is reluctant to do so.
However, the official has ruled out bringing petrol and diesel under the ambit of GST in this meeting, as reported by a section of media. “I do not think this is going to happen atleast in immediate future. At this point of time this is neither practical nor feasible. States will not let go their power to tax on petrol and diesel. Even if it has to come, this is certainly not the year to go about it,” another official in the finance ministry told The New Indian Express.
Another issue which will be discussed in the meeting is the fate of National Anti-profiteering Authority (NAA), whose tenure ends in November. The council will review its performance and may consider even merging it with the Competition Commission of India.
Besides, the council will also take a call on extending the concessional rates for Covid-19-related drugs, including remdesivir, till December 31, in the wake of rising Covid cases in some states and the prediction of third wave. The council will also take up items which require correction of inverted duty structure.
On the table
- The GST rate fitment committee has proposed that e-commerce companies engaged in food delivery should be treated as restaurant services
- Currently, the GST is paid by restaurants and not by the food delivery apps
- Food delivery firms like Swiggy, Zomato and others to face the impact