After the GST reforms come into effect from 22nd September, reports suggest that online delivery apps like Zomato, Swiggy, Zepto, and Instamart may cost more. These delivery platforms will be charged 18% GST when the new reforms come into effect. It has been reported that the delivery apps will raise the delivery fee due to revenue losses faced from the reduction of prices on many essential goods.
Experts predict that since the changes in GST will impact the operations of these companies, they might compensate for the loss by hiking the delivery fee, but the users who pay extra money for premium access and other additional services provided by these apps will not be affected. A senior executive of a food delivery company, talking to the Indian Express, said that since the operations will be impacted, the burden will fall on the customers, as not only operational costs but the salary of the delivery partners might also be impacted.
This means that a person will have to pay more tax on food delivery once the GST reforms are implemented. This new change comes after the GST council, in its 56th meeting, recommended that local delivery services be included in section 9(5) of the Central GST Act. These were earlier exempted from inclusion in the section. The order fueled industry debates of whether the burden should go to the consumers or the food-delivery apps should pay it themselves without raising the fees.
The new GST reforms have been announced by the GST Council and will bring down the number of GST slabs to only three, including 5%, 18% and 40%. Other than this, a lot of items have been reduced from 5% to nil, which is expected to boost consumption and reduce inflation in the economy. The reforms have also made the refund and registration process easy and more streamlined for new businesses.
