GST Council to debate levying 5% tax on meals supply apps like Zomato, Swiggy

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GST Council to debate levying 5% tax on meals supply apps like Zomato, Swiggy


New Delhi: The omnipotent GST Council is more likely to talk about on Friday a proposal to deal with meals supply apps corresponding to Zomato and Swiggy as eating places and levy 5 per cent GST on provides made by them, an official mentioned.

A proposal to make the supply platforms liable to pay the Items and Companies Tax (GST) on restaurant companies provided by them is considered one of over four-dozen proposals that can be taken up by the Council at its assembly in Lucknow on September 17.

If authorised, the apps can be given sure time to make adjustments of their software program to permit for such tax to be charged.

As soon as authorised by the GST Council, meals supply apps must gather and deposit GST with the federal government, rather than eating places, for deliveries made by them. There can be no additional tax burden on the top shoppers.

As per estimates, tax loss to exchequer attributable to alleged under-reporting by meals supply aggregators is ₹2,000 crore over the previous two years.

Below GST, these apps are at the moment registered as Tax Collectors at Supply (TCS).

One of many causes for designing such a proposal was that there was no obligatory registration verify by Swiggy / Zomato and there have been unregistered eating places supplying by these apps.

Despite the fact that the speed of tax is low, since meals supply volumes are excessive, the tax evasion quantity can be substantial, the official mentioned.

Evaluation of returns filed by supply apps and the restaurant companies for the state of Haryana confirmed that for Zomato, the hole in taxable turnover for suppliers the place TCS was deducted by Zomato was higher than the turnover declared by such suppliers. Due to this fact, there was evasion of tax.  

Equally, within the case of Swiggy, there was a niche in taxable turnover for suppliers the place TCS deducted by the app was higher than the turnover declared by such restaurant suppliers.

Accordingly, the suggestion of meals supply apps accumulating and depositing GST with the federal government can be positioned earlier than the GST Council, the official added. 

This story has been revealed from a wire company feed with out modifications to the textual content. Solely the headline has been modified. Subscribe to Mint Newsletters * Enter a sound electronic mail * Thanks for subscribing to our publication.

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