Zomato, Swiggy get GST notices worth Rs 500 crore each

Online food delivery platforms Zomato and Swiggy have received GST notices worth Rs 500 crore each on delivery charges, media reports said on Wednesday.

Both online food delivery platforms charge some money from customers in the name of delivery fees.

There is often a dispute between tax officers and food delivery apps regarding the delivery fee, which involves nearly Rs 1000 crore, according to the reports.

When reached for a comment, Zomato refused. Swiggy did not comment either.

As per Zomato and Swiggy, ‘delivery charge’ is nothing but the cost borne by the delivery partners who go to deliver food from door to door.

Companies simply collect that cost from customers and pass it on to delivery partners. But, tax officials do not agree with this, as per the reports.

Last month, Swiggy increased the platform fee from Rs 2 to Rs 3 for food orders.

A Swiggy spokesperson told IANS, that “there has been no significant change on platform fee, which is applied by most service players and is a common practice across industries”.

In April, the company introduced a platform fee of Rs 2 per order, irrespective of the cart value.

In August, Zomato also increased its platform fee to Rs 3 per order from an initial Rs 2.

Zomato started charging the platform fee from Zomato Gold users, who were previously exempted.