Goods and Services Tax Council may consider incorporating food delivery Apps like more Swiggy within the range of Restaurant services and make them liable to pay tax. cloud kitchen Can also be included in the scope and charged 5% GSTAccording to the recommendations, the Council can take it in its meeting on Friday.

The fitment committee, consisting of officials from various states to suggest changes in tax rates, has recommended that e-commerce Operators supplying restaurant services on their platform should be notified as ecommerce aggregators in the same category as restaurant service, thus making it a supplier who has to pay GST.

“ECOs (ecommerce operators) like Swiggy and Zomato may be made liable to pay GST on restaurant service supplied through them,” the committee said in its recommendations to the GST Council.

The panel said that the Central GST Act would have to be amended to include restaurant services, but said that restaurants of hotels with tariffs of Rs 7,500 per day and above may be excluded. “This change may be effective from January 1, 2022, to give time to the ECOs to make changes in their software etc.,” the committee said.

Cloud kitchens may also be included under restaurant services and 5% GST may be levied without input tax credit, the fitment committee has recommended. “Through a circular it may be clarified that serving of food, door delivery and services carried by cloud kitchen/central kitchen are covered under ‘restaurant service’, and attract 5% GST without ITC, The panel has said. further recommended.

The Committee noted that while order food online There was an increase through food delivery apps during the pandemic, the government was not getting proportionate revenue from taxes. It further noted that the high volume of food delivery was causing high tax evasion, especially in cases where restaurants are not registered but exceed the exemption limit of Rs 20 lakh in revenue in a year.

At present, restaurants charge 5% GST without input tax credit on supply of services including supply of food and beverages. Meanwhile, food aggregators like Swiggy and Zomato are registered as tax collectors at source. The recommendation, if accepted, would reduce the GST for food delivery apps similar to restaurants.

“This move will help the government to cover small restaurants in the purview of GST and accordingly increase the GST collection. However, on the other hand, small restaurants below the limit, which currently do not have to pay GST, will be charged additional There will be GST as cost. On their services,” said Abhishek Jain, tax partner at EY.

The restaurant and food delivery segment is seeking a reduction in GST from 18% to 5% as consumers ordering food at home as compared to those who dine on the same food and beverages since the dine-in rate of GST at restaurants I was paying more taxes. was 5%. This issue will be among the many issues that are likely to be discussed on September 17.