GST on Food Delivery: Will Online Orders Get Costlier?

With the recent changes in GST rates, many items in India—from TVs and refrigerators to small cars—are expected to become cheaper, bringing relief to citizens. However, alongside this relief, the GST Council has introduced a significant rule: a 18% GST will now be levied on delivery fees charged by food delivery platforms, making online food orders more expensive.

Industry experts estimate that this move could impose an additional financial burden of around ₹180–₹200 crore on companies like Zomato and Swiggy, forcing them to rethink their business strategies.

Law Clarification

Previously, food delivery apps such as Zomato and Swiggy were not directly liable to pay GST on delivery charges—the responsibility rested with the delivery partners. Now, under Section 9(5) of the CGST Act, the GST Council has classified local e-commerce delivery services under e-commerce operators. This means the platforms themselves must collect and pay GST on delivery fees, treating it as part of their income. This long-standing ambiguity has finally been resolved.

Profitability Concerns

Both Zomato and Swiggy had only recently achieved profitability—Zomato posted an operating profit of ₹451 crore and Swiggy ₹192 crore in the April–June quarter. But the new tax rules could significantly dent their earnings. The question now is how these platforms will adapt to the change.

Possible Impact on Customers and Delivery Workers

Sources suggest that companies may not absorb the extra tax burden entirely, instead passing some of it on to customers or delivery workers. This would mean higher food costs for customers and possibly lower earnings for delivery partners.

What Experts Say

Experts believe the overall impact may remain limited, since nearly two-thirds of food orders already enjoy waived delivery charges. Platforms often absorb delivery costs to attract more orders.

How Much Could Charges Increase?

According to estimates, delivery charges may rise by about ₹2 per order on Zomato and ₹2.6 per order on Swiggy, leading to a small but noticeable increase for customers.

Rising Platform Fees

Zomato and Swiggy already recover GST-related expenses from customers through various fees, which have been steadily increasing. For instance, Swiggy has raised its platform fee three times recently—from ₹12 to ₹13, then ₹14, and now ₹15 per order (including GST). Zomato has also increased its platform fee from ₹11.8 to ₹14.75 per order (including GST).
At the same time, both platforms reduced the minimum order value (MOV) for subscription-based orders from ₹199 to ₹99, a move seen as a way to balance out the rising costs.

Quick Commerce Apps Unaffected

For quick-commerce apps like Blinkit, the impact will be minimal since they already treat delivery fees as revenue and apply GST. Services like Instamart and Zepto, which keep delivery fees very low or free, may see only a marginal increase—less than ₹1 per order.