To prevent revenue leakage from the tax payable by restaurants in the country, the GST Council Friday approved a proposal to make food-delivery platforms like Zomato and Swiggy responsible for collecting and depositing the 5 per cent GST applicable on food with the government, effective January 1.
Even as the move may push tax collections from restaurants, it may cause an increase in compliance burden for restaurants as well as the food-aggregators.
Particularly, the move may impact restaurants with annual turnover less than Rs 20 lakh and were not liable to pay GST. “In essence, the compliance burden is likely to be shifted to food aggregators. From a consumer perspective, there should not be a material change because consumer will still pay 5 per cent GST on food. Small restaurants, which have less than Rs 20 lakh of turnover, are exempt from GST but if food-aggregators are made responsible, perhaps GST will be applicable on the smaller restaurants too,” Pratik Jain, partner, Price Waterhouse & Co, LLP said.