According to CNBC TV-18, Zomato has been issued a GST notice amounting to Rs 400 crore, while Swiggy has asked to pay a total of Rs 350 crore.
The DGGI initiated the tax demand, asserting that as food delivery is considered a service, Zomato and Swiggy are obligated to pay Goods and Services Tax (GST).
Both online food delivery platforms impose charges on customers under the label of delivery fees.
According to Zomato and Swiggy, the 'delivery charge' is the expense incurred by the delivery partners who deliver food directly from the source to the customer's doorstep.
Companies only collect this cost from customers and transfer it to delivery partners.
However, the GST officials’ opinion on this matter is different.
In 2022, Swiggy and Zomato were directed to collect and remit tax at a 5 percent rate on their orders.
Prior to this, only restaurants registered under GST were responsible for collecting and remitting the tax.