5% GST on your Online Food Orders

Food aggregators like Swiggy and Zomato will have to collect Good and Service Tax (GST) at a 5% rate beginning January 1st, 2022. This move will widen the tax base as many food vendors are currently outside the GST threshold will become liable to pay GST when provided through these online platforms. Currently, only restaurants registered under GST are collecting and depositing the tax. Also, cab aggregators like Uber and Ola will have to collect 5% Goods and Services Tax (GST) for booking 2 and 3 wheeler vehicles effective January 1. Also, footwear, irrespective, of prices will attract 12% tax from 1st. These are among many changes in the GST regime that have come into effect this year. "As 'restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the electronic commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January 2022," a circular from the finance ministry said. To tackle evasion, the GST law went through some amendments. The input GST credit will now be available only when the credit appears in GSTR 2B (purchase return) of the taxpayer. Five per cent provisional credit, earlier allowed in GST rules, will not be permitted post-January 1, 2022. The other anti-evasion measures which would come into effect from the new year include mandatory Aadhaar authentication for claiming GST refunds. Blocking the facility of GSTR-1 filing in cases where the business has not paid taxes and filed GSTR-3B in the immediate previous month. In several instances, the government has found out that several restaurants listed on the food delivery platforms were not depositing the GST, even though they were collecting from the customer.  Food aggregators like Swiggy and Zomato will have to collect Good and Service Tax (GST) at a 5% rate beginning January 1st, 2022. This move will widen the tax base as many food vendors are currently outside the GST threshold will become liable to pay GST when provided through these online platforms.

Currently, only restaurants registered under GST are collecting and depositing the tax. Also, cab aggregators like Uber and Ola will have to collect 5% Goods and Services Tax (GST) for booking 2 and 3 wheeler vehicles effective January 1. Also, footwear, irrespective, of prices will attract 12% tax from 1st.

These are among many changes in the GST regime that have come into effect this year.

"As 'restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the electronic commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January 2022," a circular from the finance ministry said.

To tackle evasion, the GST law went through some amendments. The input GST credit will now be available only when the credit appears in GSTR 2B (purchase return) of the taxpayer. Five per cent provisional credit, earlier allowed in GST rules, will not be permitted post-January 1, 2022.

The other anti-evasion measures which would come into effect from the new year include mandatory Aadhaar authentication for claiming GST refunds. Blocking the facility of GSTR-1 filing in cases where the business has not paid taxes and filed GSTR-3B in the immediate previous month.

In several instances, the government has found out that several restaurants listed on the food delivery platforms were not depositing the GST, even though they were collecting from the customer. The collection of GST through the food delivery aggregators is likely to solve this issue with the efficient collection and subsequent deposits with the government.

Currently, the law restricts the filing of returns for outward supplies or GSTR-1 in case a business fails to file GSTR-3B for the preceding two months.

Similarly, cab aggregators like Ola and Uber will also have to collect 5 per cent GST for booking two and three-wheeler vehicles effective January 1.