Friday, March 29, 2024
HomeEditor's picksCongress makes false allegations that new tax imposed for ordering food online, here is...

Congress makes false allegations that new tax imposed for ordering food online, here is the truth

New rules state that the 5% GST that restaurants were paying will now be paid by food delivery services, and there is no new tax

Congress party is trying to spread misleading information about the GST for online food order and delivery companies like Zomato and Swiggy, after new rules regarding this came into effect from 1st January. In a tweet from its official handle posted on 2nd January 2022, the Congress party has claimed that the Indians will have to pay extra charges for ordering the food online. It further posed a question asking is this the new year’s gift that the Modi government is offering to the people.

From this tweet, congress is trying to imply that with the implementation of the new rule, customers ordering the food from delivery services like Zomato or Swiggy will have to pay an extra five per cent GST to compensate for the tax to be paid by the food supplying restaurant. Zomato and Swiggy already come under the eighteen per cent slab of the GST and the congress party is trying to mislead the people by implying that with the new rule, the consumers will have to bear the burden of an additional five percent GST added to the earlier eighteen, thereby indicating a probable hike in the prices of ordering the food online. But this is not the case.

Know the actual decision

In the 45th GST Council meeting held on 17th September 2021, it was decided that the restaurants that don’t pay the taxes on the online orders they get from such platforms must be cracked down. It was found that while the food delivery services are already collecting the 5% tax on the services that they provide, they were passing it to the restaurant along with the rest of the bill, and the restaurants were expected to deposit this 5% with the govt. But some restaurants were not doing this and evading the tax.

To ensure that the government receives the tax which is otherwise evaded, it was decided that the online ordering and delivery platforms should pay the five percent GST on the delivery directly to the government. This way, the government has not burdened the pockets of the common customer but has just changed the route to collect the GST in order to ensure maximum tax compliance.

With the new rules, food delivery platforms are expected to pay 5% GST on restaurant services that they provide directly. Previously, the restaurants had collected it and deposited the tax to the government, but some of them were evading this. Therefore, now the delivery platforms will be responsible for paying the tax to the taxmen. As the delivery services are already collecting the 5% GST, they don’t need to collect any additional tax from customers are the Congress Party is alleging.

While there is no change for customers, the floor delivery companies will have to set up systems to deduct the 5% GST from the payments made to the restaurants and will be responsible for depositing the same with the govt.

Assurance by the finance minister

The finance ministry has already clarified that the customers availing the online food delivery services need not pay any new tax. The five percent GST to be collected from the food supplying restaurants will only be deposited by a different route than before. While announcing the change in rules in September, Union finance minister Nirmala Seetharaman had said that the food delivery platforms will have to pay GST on restaurant service. “There is no new tax,” she had clarified.

“The sum and substance of what is agreed, is the place where the food is delivered will be the point on which the tax will be collected by the gig groups, Swiggy and others, and they will therefore pay up GST on it,” finance minister Nirmala Sitharaman had said explaining the new system.

Ayodhra Ram Mandir special coverage by OpIndia

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staff
OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

Related Articles

Trending now

Recently Popular

- Advertisement -

Connect with us

255,564FansLike
665,518FollowersFollow
41,500SubscribersSubscribe