I-T department to probe discounts offered by Zomato, Swiggy
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I-T department to probe discounts offered by Zomato, Swiggy
Come January, discounts offered by online food delivery platforms Zomato and Swiggy are set to face Income tax department’s scrutiny under the GST regime, The Economic Times reported on December 29.
The concern surrounding the probe is the coupon discounts offered by food delivery applications on using a particular credit card, debit card or any digital wallets for making payments.
Besides, what might also be a point of the probe is the arrangement founded between restaurants and the applications, which form the base of these discounts. From 1st January, 2022, both Zomato and Swiggy are set to be treated at par with restaurants. Coming under this setup would potentially mean that applications like Swiggy and Zomato would have to pay a tax of around 5 percent on the total cost of food.What is the issue?Unlike when you order food directly from the restaurant, food delivery applications, which function as e-commerce operators, offer discounts at various transaction points on the usage of a specific way of payment, like a debit/credit card, digital wallet or more.Additionally, if customers order beyond a particular amount or from a certain restaurant, they are given extra discounts.One of the prime questions here is that on what price should the GST of 5 percent be levied on-the original price or the discounted one? Say, for instance, you order your favourite Pizza combo worth Rs 650. But when you pay through any application, you get a discount of Rs 100, which means you ended up paying only Rs 550.So, at what price will the 5 percent GST be actually charged? On the original charge of Rs 650 or the discounted Rs 550?There are impediments in determining the exact amount on which GST must be paid, sans the discount as well. Notably, complexities already exist around treatment for tipping delivery boys, surge fees, delivery fees and packaging charges charged to customers under the GST framework.Since small eateries or dhabas do not pay GST, the burden of paying GST on customers’ orders would fall on the delivery apps. Notably, restaurants are charged 5 percent GST but remain devoid of an input tax credit on the amount. Given that these delivery applications incur huge costs in terms of technology and rent, they would definitely want to avail such credit. For this, companies are looking to charge 18 percent instead of the usual 5 percent.https://www.moneycontrol.com/news/business/swig...
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Mitron, na khauga(Jumla), na khane duga(reality).
I think this has been discussed before here. It’s a old news I guess 😕
In every order they charge taxes
.. What is that?
They want to make swiggy /zomato compliant to gst that is 5% on every food order and put onus on food aggregator to pay tax on every order. instead of restaurant. Now they want to probe the discount understanding between restaurant and FA. and also card discounts Confusion is to apply tax on real order value or order value after discount. Overall govt. want to milk as much money as they can.
It has become a reality now that this Govt don’t know how to create new jobs/fill vacancies but good at killing every new sector. If discounts go people will stop ordering resulting in joblessness of riders.
Every step they took had resulted in negative impact. Keep doing this and we will be left with no other option than to have a Coalition Govt in 2024.
Now coming to post itself, every discount providers or gift card cb providers are evading taxes in huge amt as they show discount as expense and no GST paid. Also by discounting item the GST on item itself becomes very low. So the thing is Govt is actually paying for the discount customers getting. But why only Swiggy/Zomato. Put Jio on the block also for offering huge discounts and also kill Amazon/Flipkart and digital wallet. Kill HDFC Bank also. Then with DIGITAL INDIA we will be buying everything from brick and mortar sellers.
One more instance is by selling through these channels, Restarants are too evading taxes and bill amt to swiggy is not counting towards their sales and GST of 5% getting to zero as they already take input credit to avoid double GST.
Ex: I have a restaurants. Bought raw material from person who already paid GST. Took input credit for material I puchased. Sold the finished item through Zomato/Swiggy aren’t under GST ambit. Income to Govt- Only via raw material. Value addition at my restaurant + delivery channel- Rs.0. Govt ko mila Baba Ji Ka Thullu. 
Bro. Why not put GST and income tax on party funds. Already salaries of people are down. Why just loot middle class. Why no cost cutting on PM’s plane, new car, new house, new parliament building, useless inaugrations, trips, 5 set cloths per day, pegasus tapping costs etc etc
This hafta is for our Emperor’s Mercedes Maybach EMI payment
Header says Income Tax. Content talks about GST application which is dealt by a completely different dept. There are already provisions in GST to charge ta on gross price where discounts are given during sale.
The only Job of bureaucrats is to make people’s life more difficult.
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What will dimmers do now ?