GST Changes in Food Services: What You Need to Know

Kokila Chokkanathan
1. Delivery Platforms Could Get Costlier

· Platforms affected: Zomato, Swiggy, and other delivery apps.

· New tax: 18% GST on local delivery charges through Electronic Commerce Operators (ECOs).

· Impact:

o Delivery fees make up 10–20% of revenue.

o customers may see higher delivery charges.

o Restaurants may absorb some costs, depending on platform agreements.

· Existing taxed items like surge pricing and packaging remain the same.

2. Fast-Food Chains May Benefit

· QSRs affected: Domino’s, McDonald’s, burger King, and similar chains.

· GST cuts on key ingredients:

o Cheese

o Butter, ghee, margarine

o Sauces

o Packaging materials

· Why it matters: QSRs can’t claim input tax credits, so any tax reduction directly increases profits.

· Estimated gains:

o Large chains: 0.7–0.8% improvement in margins

o Smaller organised players: 0.2–0.4% improvement

3. Potential Impact on Consumers

· Delivery apps: May raise delivery fees, so ordering in could become more expensive.

· Fast-food outlets: Could pass on tax savings via:

o Lower menu prices

o More promotions or combo offers

· Bottom line: Eating out at fast-food chains might become cheaper, while delivery costs may rise.

Summary:

· Ordering in: Likely costlier due to new 18% GST on delivery charges.

· Eating at fast-food chains: Potentially cheaper thanks to reduced taxes on ingredients.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.


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