The restaurant industry is concerned about how the move to levy the GST on Zomato and Swiggy would be implemented and is planning to reach out to the government on the matter.
They are seeking clarity for the price-sensitive smaller restaurants currently exempt from GST that have been getting on boarded on the two platforms post Covid and are wondering if the tax on Zomato and Swiggy would spill over to them. Other operational guidelines also need to be issued for the implementation, they said.
“We would be sending suggestions which should be considered as a lot of operational issues will arise and there must be proper guidelines. How and when would this be implemented? There is also the issue of existing thresholds for GST implications on restaurants under various slabs and how this impacts them” said Pradeep Shetty, joint honorary secretary, Federation of Hotel & Restaurant Associations of India (FHRAI).
The industry wants to know if the smaller restaurants that do not pay GST will have to renegotiate contracts with the two platforms as a result of the move,” a restaurateur familiar with the matter said.
“We are only concerned about the implications on smaller restaurants wherein registration under GST is not mandatory, or they are categorised under the composition scheme, for the purpose of lessening the burden on small businesses,” said Shivanand Shetty, president of the Indian Hotels & Restaurants Association (AHAR).
A person familiar with the matters at Zomato said the company is in touch with the authorities to figure out the implementation. “Conversations with the government are ongoing on how this would work,” the person said. Zomato and Swiggy did not respond to emails seeking comments till the time of going to press.