Zomato, Swiggy Face RS 180 200 CR GST Bredden as the delivery fee attracts 18 % of a tax; Will your food bills rise?

The two largest food delivery platforms in India, Zomato and Swiggy, are preparing for a large financial strike after the Commodity and Services Tax Council showed that the delivery fees collected will now attract the commodity and services tax by 18 percent (GST). The clarification, rooted in Section 9 (5) of the Central Commodity and Services Tax Law, requires that digital platforms are vulnerable to collecting and transferring taxes on behalf of service providers in specific sectors, including food delivery.

This long -awaited clarification ends the debate on whether the platforms are responsible for the tax and services tax on delivery fees. Analysts estimate that the ruling can impose an additional tax burden of about 180-200 rupees on the two companies combined. Mediation Morgan Stanley noticed that this step increases the complexity of revenue forms for food technology platforms, which already face challenges in balancing the ability to withstand customer costs while compensating the delivery partner.

For Zomato and Swiggy, timing is very important. Both companies recently reported the operating profits – Zomato of 451 rupees in June – June, and Swiggy’s Food Provision of 192 rupees. However, the responsibility for the commodity and services tax is expected to pressure the pressure margins and prepare strength adjustments in business models. The platforms had previously absorbed the gap between customer delivery fees and delivery partners as part of their growth strategy, and often waived the delivery fees to increase the sizes of requests.

To manage financial influence, the two companies consider transferring a share of the burden on consumers and delivery partners, a report in economic times. “This will be partially transferred to delivery workers and will be possible to reduce their profits in the direct term,” confirmed by a senior executive in Zomato. Swiggy executive official chanted similar plans, saying that the company will transfer part of the tax costs.

The effect is modest, analysts say

Despite these concerns, some analysts expect the total effect to remain modest. In a recent note, JM Financial said this step is likely to have a little effect on both Zomato and Swiggy. The mediation highlighted that in the delivery of food, nearly two -thirds of the sizes of requests already sees the delivery fees removed from them. In rapid trade, the Blinkit, owned by Zomato, is applied, already 18 percent tax and services tax on delivery fees, while Swiggy’s Instaamart waives most of the requests.

Moreover, mediation mediation indicated that food technology platforms have historically managed to transfer GST costs to consumers across different fees. The high platform fees are strengthened by the two companies this trend. For example, Swiggy raised the platform fee three times in several weeks – from 12 rupees to 13 rupees, then to 14 rupees, and recently to 15 rupees per request, including GST. Zomato also increased the platform fee from 11.8 rupees to 14.75 rupees per request, including the tax and services tax.

Meanwhile, both companies recently reduced the minimum order value (MOV) for subscription -based requests from 199 to 99 rupees. JM Financial noticed that although this step may enhance the sizes of requests in a weak macro environment, it reduces revenues for each request and shrinks of delivery fees. The recent increases in the statute fees appear to be designed to compensate for this effect.

“The demand has been widely flexible to increase the platform fees so far, encouraging food technology platforms to carry out such increases. This supports modified EBITDA margins,” JM Financial note.

Looking forward, the brokerage projects that Zomato and Swiggy will be about 110 rupees and 80 rupees for food delivery, respectively, by fiscal year 27. It is estimated that the height of fees, with the exception of the commodity and services tax, could have been raised by 270 rupees for Zomato and 200 crushers for Sawagghei. However, with a decrease in Mov, the benefit of the flow may be lower than expected.