Ordering food online? Think twice as delivery fees just got costlier with new GST rule

Mumbai: Food delivery bills may soon pinch your pocket a little more. The Goods and Services Tax (GST) Council has decided to bring local e-commerce delivery services under section 9(5) of the CGST Act, meaning delivery fees charged by platforms like Zomato and Swiggy will now attract 18% GST.

Until now, GST on delivery charges was inconsistently applied since platforms often treated the fee as a pass-through to delivery partners. Under the new rule, however, the tax liability will rest with the platforms, regardless of how the fee is recognized.

What It Means for Consumers

• Zomato: With an average delivery charge of ₹11–12 per order in FY25, the GST impact could be about ₹2 extra per order.
• Swiggy: With an estimated average delivery fee of ₹14.5 per order, the GST hit could be ₹2.6 per order.
• Blinkit (Zomato-owned): Already levies GST on delivery charges, so no incremental impact.
• Swiggy Instamart: Average delivery fee of ₹4 per order, implying an additional ₹0.8 per order.

Industry Impact

According to analysts at Morgan Stanley, the change creates a dilemma for food delivery majors:

• If they absorb the GST, profitability may take a hit.
• If they pass it on to customers, demand could soften.

On the flip side, lower GST rates on several food and consumer goods may help offset the pinch for customers, potentially boosting overall demand for online platforms.

Analysts also note that this clarity could help resolve pending GST disputes with state authorities over past delivery service taxation, though resolution may take time.