Here’s why food delivery services could become costlier soon
The GST Council is expected to consider levying tax on food delivery services at its September 17 meeting.
Food delivery services offered by online platforms like Zomato, Swiggy and others could very soon become costlier, if a proposal to levy tax on these services is approved at the upcoming meeting of the Goods and Service Tax Council. The next meeting of the GST Council is scheduled to be held on September 17 in Lucknow and the council is expected to consider bringing food delivery services under the tax net, the New Indian Express reported quoting Finance Ministry sources.
Food delivery apps to be taxed like restaurants
According to the report, the fitment committee has proposed that food delivery apps be treated as restaurant services and taxed accordingly, bringing them under Section 9(5) of the CGST Act.
As the law stands today, GST is paid by the restaurants, not by the food delivery services. The paper quoted unnamed officials as saying that the proposal is likely to be discussed in the upcoming 45th GST Council meeting which will be chaired by the Union Finance Minister Nirmala Sitharaman.
Other agendas for the GST meeting
Another agenda that was rumoured to be discussed in the meeting – bringing petrol and diesel under the ambit of GST – may not happen, officials quoted by the New Indian Express said. “I do not think this is going to happen at least in the immediate future. At this point of time this is neither practical nor feasible. States will not let go their power to tax on petrol and diesel. Even if it has to come, this is certainly not the year to go about it,” an official told.
The fate of the National Anti-profiteering Authority (NAA) will also be discussed in the GST Council meeting. The council is expected to review the performance of the NAA, whose tenure ends in November. NIE expressed the possibility of it being merged with the Competition Commission of India.
The publication also reported quoting sources that other items on the agenda of the GST Council meeting include a possible extension of compensation cess beyond five years, as demanded by some of the states, in the context of the damages caused by the Covid-19 pandemic. While the Centre may be reluctant to allow an extension of the promised deadline of June 22, some states are reportedly demanding it in light of the economic losses due to the pandemic.