GST LIABILITY FOR RESTAURANT SERVICES TO BE PAID IN CASH BY E-COMMERCE OPERATORS

E-commerce operators (ECOs) in the food delivery business, such as Zomato and Swiggy, would be required to pay GST on supplies from both registered and unregistered restaurants. In addition, they will not be eligible for an input tax credit (ITC). The goal is to increase tax efficiency. When a small restaurant sells food via an internet delivery platform, the latter is responsible for collecting the tax from the customer and remitting it to the government.

This explanation is contained in a circular released by the Finance Ministry in preparation for the new system’s implementation on January 1. Food-delivery ECOs will be accountable for paying GST under the new regime. Currently, the restaurant is responsible for payment. The government has previously said that this is not a new tax and that customers would not be affected.

The current tax rate of 5% will be maintained. Because the GST on restaurant services is 5% but does not include an ITC, the same concept will apply to ECOs. “ It should also be highlighted that ECO would pay the whole GST due in cash for restaurant services (no ITC could be utilized for payment of GST on restaurant service supplied through ECO).

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