GST Reforms: Ordering Food Online? Your Zomato, Swiggy Bills May Get Costlier—Here's Why

If you use Zomato and Swiggy for your cravings, the recent hike in platform fee may have pinched your pocket a bit. Get ready for some more.

The Goods and Services Tax Council has brought local e-commerce delivery services under section 9(5) of the CGST Act. This section deals with taxability of supply of services, the output tax of which shall be paid by the electronic commerce operator (ECO) if such services are supplied through it, even though ECO is not an actual supplier.

This means delivery fee will now attract a GST rate of 18%.

Previously, GST was not consistently applied to the delivery fees charged by platforms like Zomato and Swiggy, especially when the fee was considered a "pass-through" to the delivery person.

Now, these platforms will have to pay GST of 18% of the delivery fee irrespective of whether they recognize it as part of revenues or consider it as a pass through. Besides, the platforms raise delivery fee during rains and for deliveries after midnight.

For Zomato, the food delivery services had a customer delivery fee of Rs Rs 11-12 in fiscal 2025 as per calculations by international investment firm Morgan Stanley. This would imply a potential GST impact of Rs 2 per order.

For Swiggy, analysts estimate the delivery fee to be approximately Rs 14.5 per order, implying potential impact to be Rs 2.6 per order.

When it comes to quick-commerce segment, the delivery fee was part of Zomato-owned Blinkit's revenues and was already attracting GST. Hence, there would be no new incremental impact on the company.

Swiggy Instamart had a much smaller component of delivery fee of Rs 4 per order as per the firm's calculations and hence the potential impact could be Rs 0.8 per order.

Morgan Stanley said the GST change could either hurt Swiggy and Zomato's profitability if they absorb the cost or their demand if they pass the cost on to the consumer. However, companies like Blinkit were already collecting GST on their delivery fees, so the impact on them may be minimal.

Moreover, the firm said the two companies have faced GST demands from various states on past delivery services. "With this notification, there is a possibility of resolution on past cases over time, although this could be more complicated as cases are pending at state levels," a note said.

Analysts also said that with GST rates coming down on many food items and consumer goods, there is a chance of overall prices coming down for consumers and boosting demand sentiment. This would bode well for platform companies.