Food Delivery to Get Costlier? Zomato, Swiggy Face ₹200 Crore GST Burden Annually
5 Sep, 2025 13:11 IST|Sakshi Post
Ordering food through Zomato or Swiggy could potentially become costlier as both the companies are staring at an additional GST burden of ₹180–200 crore each year after the GST Council clarified that online marketplaces must pay 18% tax on delivery services provided by gig workers. Until now, delivery partners were outside the GST net.
Both companies have signaled they will pass on at least part of this new cost. Reports suggest Zomato may reduce delivery workers’ earnings in the short term and could even consider adding a customer fee. Swiggy is expected to take a similar route.
This clarification ends a long-running dispute between food delivery platforms and the government over whether aggregators were liable to pay GST on delivery fees collected from customers and passed to delivery workers. The timing is notable, as Zomato received a ₹803 crore GST demand notice in December 2024 for unpaid tax, interest, and penalty for 2019–2022. Swiggy too has faced a pre-demand notice, though it’s unclear how the Council’s new stance will impact these cases.
Brokerage firm Jefferies called the ruling “a slight negative” for both firms, which are already reporting slower growth — under 20% year-on-year gross order value increases in recent quarters. Morgan Stanley noted that delivery fees, which previously escaped GST, will now be fully taxed.
At the heart of the issue is Section 9(5) of the Central GST Act, which requires digital platforms in sectors like food delivery, ride-hailing, and e-commerce to collect and remit GST on behalf of service providers. Since food delivery is categorized as a service, it attracts 18% GST.
Platforms have argued that they do not profit from delivery fees, as most of the money is paid to gig workers, with platforms often covering the gap when discounted or free delivery is offered to customers. Still, the government maintains that since platforms charge service fees and control the transaction, the tax liability rests with them.
