The Directorate General of GST Intelligence (DGGI) has issued demand notices totaling INR 1,000 Cr to popular food delivery platforms Zomato and Swiggy. The notices pertain to Goods and Services Tax (GST) dues on the delivery fees collected by the platforms since the inception of their food delivery services.
According to reliable sources, both Zomato and Swiggy have been individually asked to pay INR 500 Cr each, representing the 18% tax levied on the total amount amassed through delivery fees. This development marks a new chapter in the ongoing tax challenges faced by these food delivery giants.
The tax authorities now view the delivery charges collected by Zomato and Swiggy as part of their revenue, triggering the GST notices. This move follows a trend of increased scrutiny on the financial operations of tech-driven platforms.
Swiggy, which initiated charging for food delivery services in 2016, and Zomato, which followed suit shortly afterward, find themselves at the center of this tax controversy. The tax authorities argue that the delivery fees should be subject to the 18% GST, considering it as part of the platforms’ overall revenue.
Interestingly, this development comes at a time when Zomato has recently declared profitability in Q1 FY24. In a parallel milestone, Swiggy, on its path to an initial public offering (IPO), has claimed to achieve profitability in its food delivery business as of March 2023.
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