Our Bureau
Mumbai
The new reforms of the Goods and Service Tax that were recently introduced by the Central Government. These new slabs are going to impact the food delivery partners the most as companies like Eternal Ltd. (formerly known as Zomato) and Swiggy Ltd. are ought to face a GST outgo of up to Rs 400 crore per year.
As per the reports, both Eternal and Swiggy are figuring out a way on how they can evade the massive tax hit that is coming their way. Both the companies are looking at cutting down the payouts to the delivery workers as the best available option for them to pass through the storm but with direct knowledge of the matter to the people involved. This will be a huge step as Zomato has a network of around 3.5 lakh delivery partners whereas Swiggy has over 5.2 lakh.
Shobit Singhal, research analyst at Anand Rathi Institutional Equities, stated that both platforms will likely suffer an annual hit of Rs 200 crore and thus are likely to take a huge impact. He stated, “GST liabilities on platform-based deliveries will likely result in up to a Rs 200 crore annual hit on Swiggy and Zomato each. If passed on to the consumer, daily volumes for both platforms are likely to take a hit, especially after the recent round of platform fees hike.”
The new GST Council clarification has issued a mandate that ensures that the online marketplaces must pay an 18% GST on delivery fees collected. This is done on behalf of the gig workers, who were previously exempt from GST compliance and didn’t have to pay any tax. This change will finally solve the ever-persisting debate on who should pay the tax on the fees that is passed to gig workers.
