Here you will get knowledge of the latest trending business news. The GST Commission has instructed online food delivery platforms like Swiggy and Zomato to collect and contribute five for GST instead of restaurants. However, the decision does not affect the end user. New government regulations require grocery delivery apps like Zomato and Swiggy to collect and deposit 5% GST in exchange for restaurants taking orders.
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App-based online food delivery platforms like Zomato and Swiggy are now required to pay 5% Goods and Services Tax (GST). The decision was taken at the 45th GST Board meeting last Friday, and many social media users were disappointed with the decision, believing they would have to pay more for shipping under the new GST .
However, this business news soon became clear that the move would not affect end users as no new taxes were proposed or added. In a press conference after the meeting, Finance Minister Nirmala Sitaraman stated that e-commerce businesses (ECOs) such as Zomato and Swiggy must collect and deposit 5% GST on grocery . This is because grocery delivery apps like Zomato and Swiggy are registered as TCS or tax collectors.
Thus, the Commission’s decision is more likely to affect food delivery requests than customers who have paid this restaurant food delivery tax. As of January 1st, food delivery apps and cloud kitchens must collect and pay 5% tax. Finance Minister Nirmala Sitaraman said the rules were put in place to stop the revenue leak that is currently occurring in the structure as many restaurants avoid paying VAT on grocery.
“The food delivery point will become a tax haven for services like Swiggy and Zomato,” he said. Strictly speaking, a consumer who pays a 5% tax on food delivery to a restaurant now pays taxes to Zomato and Swiggy. Finance Minister Tarun Bajay explained that the move would not affect end consumers and would not require additional payments.
For example(Business News) , if you order food from an aggregator, the restaurant now pays tax. However, we noticed that some restaurants do not pay. Now we say that when you order, the aggregator collects consumers and pays the authorities instead of dealing with the restaurant. “There are no additional taxes, no new taxes,”. “The tax that the restaurant pays is now a tax paid by the aggregator, not the restaurant. It also blocks the source of income, ”
Finance Minister Nirmala Sitaraman said the GST board of directors discussed on Friday the issue of misleading Swiggy and Zomato . But there will be no new taxes, the finance minister said. “Lack of understanding and specific questions about whether the territory where the concert office is located or the service area is subject to taxation.
The essence of the deal(Business News) is that the place of delivery, which will be the place of delivery of food, is where services such as Swiggy and Zomato collect taxes, ”said Nirmala Sitaraman. Now aggregators like Zomato and Swiggy have to pay taxes.
Will the price of products ordered through the grocery delivery app go up? The Treasury said this is not a new tax. Thus, end users do not need to pay extra. Even though I left the restaurant early, there were places where customers did not pay GST even if they received it.
The authorities are currently collecting applications and paying for them. Swiggy and Zomato are already registered as tax collectors with the GST source( Business News ). The report says the changes will limit high rates of tax evasion. West Bengal Minister Chandrim Bhatacharya, who attended the meeting on behalf of Finance Minister Amit Mitra, said the issue had been referred to a group of ministers.
How it works? The grocery delivery app lists restaurants that deliver groceries on-demand to different locations. Restaurants currently pay 5% GST on food bills and aggregators pay 18% GST on fees they charge restaurants. If you just collect and send money, the price of the food does not go up, but the type of food is different and the taxes are different, so this is not disclosed.
The food delivery(Business News) operators like swiggy in Zomato who collect the orders from the restaurants and deliver it to the customer so the place where the food is delivered will be the point on which the tax will be taken the tax will be collected by the give groups swiggy . Union finance minister Nirmala sitharaman told on Friday after the meeting was done.
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