The 56th meeting of the GST Council has introduced a key clarification on the taxation of delivery services under GST 2.0. This new framework is set to shift the balance between food delivery platforms like Zomato and Swiggy, and restaurants that operate their own delivery networks.
From September 22, delivery services provided through e-commerce operators such as Zomato and Swiggy will attract 18 per cent GST. This levy is in addition to the 5 per cent GST already applied to restaurant services. On the other hand, chains like Domino’s, which run their own delivery networks, will continue to charge only 5 per cent GST on food orders, without the additional 18 per cent tax on delivery.
For customers, this creates a clear incentive to place orders directly with restaurants rather than through aggregator apps. Direct orders will attract just the 5 per cent GST on food, whereas orders routed through platforms will see higher delivery costs due to the new tax.
Industry experts note that this could significantly affect the business model of food delivery companies. A senior executive from a leading aggregator estimated that the tax change could result in an annual revenue hit of over Rs 200 crore. To offset this, platforms may raise delivery charges, reduce payouts to delivery partners, or increase food costs, further encouraging customers to choose direct restaurant orders.
The new tax clarification also echoes concerns previously raised by the restaurant industry. In 2019, the National Restaurants Association of India (NRAI) launched the #logout campaign, urging customers to order directly to reduce dependence on aggregator platforms. Many restaurant owners have long complained of high commissions, strict discounting policies, and alleged antitrust practices by delivery platforms.
With GST 2.0, restaurants with independent delivery networks may now find themselves in a stronger position. For consumers, this could mean a renewed shift towards ordering directly from local eateries or restaurant chains, avoiding the extra tax burden imposed on aggregator deliveries.
