Swiggy, Zomato online food prices go up from Jan 1: Know why

Swiggy, Zomato and other online food ordering services to pay additional tax in accordance with new government laws.

The change in the law will also require small restaurant owners and food shops to pay five percent GST for every online order. (Hemant Mishra/mint)

As the New Year is right around the corner, online food ordering services like Zomato and Swiggy are likely to increase prices. Starting January 1, food aggregators services will need to pay to pay five percent of Goods and Services Tax (GST) for cooked food orders through their platforms. That means Swiggy and Zomato could end up increasing prices of all orders in compliance. 

“As ‘restaurant service' has been notified under section 9(5) of the CGST Act, 2017, the e-commerce operator (ECO) shall be liable to pay GST on restaurant services provided, with effect from the 1st January, 2022, through ECO,” the circular said. “ECOs will be liable to pay GST on any restaurant service supplied through them including by an unregistered person,” it added.

Swiggy, Zomato order prices to go up

With the changes in the law, online food services will be liable for collecting and depositing GST from all the restaurants and hotels they host on their platforms. Hence, services like Zomato and Swiggy will now need to add the separate 5 percent GST on all orders, other than the usual 18 percent GST that these services already charge. 

The change in the law will also require small restaurant owners and food shops to pay five percent GST for every order they get via these online platforms. Note that the prices could reflect even if Swiggy and Zomato users opt for their premium membership plans. 

For those wanting to save money on food after 2022, they could take advantage of the several free coupons that these platforms offer to customers on special occasions. Additionally, the food from those restaurants will still keep the same old prices, hence you could save money by collecting directly from the restaurants. 

The five percent GST has also been implemented for ride-sharing platforms. All such platforms transporting passengers by any type of motor vehicles starting January 1 are liable to pay extra GST. However, if you take bike and auto bookings, there will no such charges.