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If you are living in a metropolitan area in India, chances are you regularly order food from <keyword id="19901323" type="General" weightage="100" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="261" meta.entityid="Zomato">Zomato</keyword>. The company launched in India in 2008 and was earlier just a food delivery service. Overtime, it evolved into a food discovery platform as people can rate restaurants, reserve tables, leave reviews and more. Now, we all know that when we order food via Zomato we end up paying slightly more. There are various charges that the company levies on users including handling charges and delivery fee. In August last year, Zomato started charging a <keyword id="20299300" type="General" weightage="20" keywordseo="platform-fee" source="keywords">platform fee</keyword> from users. And this has proved to be a successful business move for the platform as during its annual report, the company revealed that it has collected Rs 83 crore till March from levying platform fee. So what exactly is this platform fee that has raked in moolah from the company? Moreover, how does it benefit Zomato and what effect does it have on the end consumer? Read on to find out. <h2>What is Zomato’s platform fee?</h2>Zomato's platform fee is a small additional charge that the company adds to your order. Think of it as a convenience fee for using the app's services, including delivery, customer support, and the seamless experience of browsing through hundreds of restaurant options. Initially, the company used to levy Rs 2 per order as platform fee. But that amount has grown in the last one year and today Zomato charges Rs 6 as platform fee in key areas. It can be located when you load the bill details of your order. <div type="image" title="Zomato levies platform fee" msid="112313825" hostid="261" sizebytes="48995" caption="&amp;lt;p&amp;gt;Zomato levies platform fee&amp;lt;/p&amp;gt;"></div> <h2>How it impacts Zomato</h2>The Platform fee might seem like a minor addition to your bill, but when multiplied by millions of orders, it becomes a significant source of revenue for Zomato. Since every order placed incurs this charge, it increases the company’s "take rates" — the profit made per order. This fee serves as a crucial, controllable revenue stream in the supply chain, providing a steady income source that companies can directly manage. Alongside advertising fees and restaurant commissions, the platform fee has become a significant revenue generator for Zomato. In other words, levying a platform fee is basically a clever way for Zomato to boost its revenue without significantly increasing the prices of individual menu items. During its annual report, Zomato identified the platform fee as one of the three main factors driving Zomato's Adjusted Revenue, which saw a 27 percent year-on-year growth, reaching Rs 7,792 crore in FY24. "Adjusted Revenue as a percentage of GOV (gross order value) continued to rise, primarily due to higher restaurant commission take-rates, improved ad monetization, and the introduction of the platform fee from Q2FY24 onwards," the report highlighted. The report also added that all of the above mentioned factors compensated for the reduction in customer delivery charges per order due to the free delivery benefit available on Gold orders. <h2>How are you affected by Zomato’s platform fee?</h2>Zomato’s report also revealed that most late-night orders in the last fiscal year came from Delhi NCR, while Bengaluru led in the number of breakfast orders. Now the question that arises is, how exactly is the end consumer being affected by the platform fee? One of the obvious answers is that it makes your order a bit more expensive. Especially if you order from the food delivery giant on a daily basis. You might not even notice the addition of Rs 6 in your final bill but if you order food from Zomato everyday and start calculating, it will come up to be a noticeable amount. Say you have ordered food from Zomato everyday since the last three months. In this case, you would have ended up paying around Rs 540 as platform fee. Moreover, platform fee tends to be higher during peak hours or weather conditions. Thus, the order ends up being even costlier. Just last month, CEO of Bengaluru-based company <keyword id="22689022" type="General" weightage="20" keywordseo="capitalmind-deepak-shenoy" source="keywords">Capitalmind Deepak Shenoy</keyword>, was making headlines for saying that he has reduced ordering food from <keyword id="19896956" type="General" weightage="20" keywordseo="swiggy" source="keywords">Swiggy</keyword> and Zomato because of higher platform fees. “Massively reduced ordering from Swiggy/Zomato, down to just once maybe on a weekend, like today and noticed their 'platform' charge is now ₹6. Happy that I weaned myself off the daily ordering. They also take 30 percent from restaurants, btw,” he wrote in a post on X (earlier called Twitter).

Zomato earned Rs 83 crore from platform fee: What it is, how it benefits the company and how it affects you

In today’s market, where convenience is the king, it's getting increasingly possible to get almost everything under the Sun home-delivered in urban India. But not the alcohol! Now, major players like <keyword id="19896956" type="General" weightage="20" keywordseo="Swiggy" source="keywords">Swiggy</keyword>, Zomato, <keyword id="20069203" type="General" weightage="20" keywordseo="Blinkit" source="keywords">Blinkit</keyword>, and BigBasket are eyeing this lucrative opportunity, ready to transform the way we enjoy our evenings (or feed our vices depending on how one takes it). As regulations offer hopes of loosening with the rising consumer demand, the question on everyone's mind is: will <keyword id="22432889" type="General" weightage="100" keywordseo="alcohol-home-delivery" source="keywords">alcohol home delivery</keyword> become the new norm? As per the media reports, the quick commerce platforms might soon start delivering low-alcohol drinks like beer, wine, and liqueurs, at least in some parts of the country. A report from the Economic Times reveals that states like New Delhi, Karnataka, Haryana, Punjab, Tamil Nadu, Goa, and Kerala are thinking about trying out this service. Industry executives say that authorities are currently looking at the advantages and disadvantages of allowing alcohol deliveries. <h2>State authorities collecting feedback</h2>State authorities are reportedly collecting views from <keyword id="22432890" type="General" weightage="20" keywordseo="instant-delivery-platforms" source="Orion">instant delivery platforms</keyword> and spirit manufacturers for assessing the pros and cons of delivering low-alcohol liquors. "This is to cater to a growing expat population, especially in larger cities, changing profiles of consumers who perceive moderate alcohol-content spirits as recreational drinking along with meals, and women and senior citizens who have flagged buying from traditional liquor vends and shop-front experiences as unpleasant," one of the executives told Economic Times. According to the ET report, only Odisha and West Bengal allow home delivery of alcohol at the moment. During the COVID-19 lockdown, Maharashtra, Jharkhand, Chhattisgarh, and Assam also allowed it temporarily, and it was successful despite some restrictions and hurdles. <div type="Article" hostid="261" msid="111758782" title="Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier" mstype="2" mssubtype="0"></div> <h2>Enthusiasm grows across sectors</h2>Retail industry executives say that online alcohol deliveries have increased sales by 20-30% in West Bengal and Odisha. Although the idea of online home delivery of liquor faced several challenges including political backlash and pressure from physical retail bodies. For now Swiggy and Spencer’s retail delivers spirits in West Bengal. Dinker Vashisht, vice president of corporate affairs at Swiggy said “Online models ensure end-to-end transaction records, age verification and adhere to limits. Further, online tech stacks synchronise with regulatory and excise requirements, ensuring adherence to timings, dry days and zonal delivery guardrails” Beer manufacturers like United Breweries and AB InBev are also interested in this concept, an industry executive told ET. “Beer blends more with grocery shopping, especially for consumers in big cities, and needs to be chilled, which limits its visibility in liquor vends.” In 2020, AB InBev started Beerbox, a platform that listed places delivering alcohol within a 3-4 km range. This was after Maharashtra temporarily allowed home deliveries during the pandemic. Overall, as regulations, consumer demand, and the capacity of online quick-commerce platforms align, the days of cancelling the evening plans to avoid stepping out to buy alcohol might soon be behind us. SEE ALSO: <a href="https://www.businessinsider.in/business/news/jio-financials-gets-rbi-nod-to-become-core-investment-company/articleshow/111677548.cms" data-type="tilCustomLink" target="_blank">Jio Financials gets RBI nod to become Core Investment Company</a>

Will alcohol home delivery be a reality soon? Swiggy, Zomato, and Blinkit smell an opportunity

<ul><li><keyword id="19901323" type="General" weightage="20" keywordseo="Zomato" source="keywords" meta.keywordsubtype="org" meta.entityname="Zomato" meta.hostid="261" meta.entityid="Zomato">Zomato</keyword> and <keyword id="19896956" type="General" weightage="20" keywordseo="Swiggy" source="keywords" meta.keywordsubtype="org" meta.entityname="Swiggy" meta.hostid="261" meta.entityid="Swiggy">Swiggy</keyword> have increased the <keyword id="20299300" type="General" weightage="100" keywordseo="platform-fee" source="keywords">platform fee</keyword> charged to users by 20%.</li><li>With this increase, the platform fee has increased from ₹5 to ₹6.</li><li>The platform fee charged is different from GST, delivery charges and restaurant charges applied on the platforms.</li></ul> Your food deliveries will get costlier as Zomato and Swiggy have started increasing the platform fee by 20%. The <keyword id="19922227" type="General" weightage="20" keywordseo="food-delivery-platforms" source="keywords">food delivery platforms</keyword> will now charge users ₹6 per order. Food delivery platforms Zomato and Swiggy introduced platform fees in 2023, which began at ₹2 per order. This was then increased to ₹3 and then to ₹5 in April 2024. <h2>Platform fee increases threefold</h2>In yet another increase, the two food delivery platforms have increased the platform fee to ₹6. This means that the platform fee has increased threefold in a year. The platform fee is different from other charges levied on orders such as GST, delivery charges and restaurant charges. Customers are required to pay this charge irrespective of any membership such as<a href="https://www.businessinsider.in/business/news/swiggy-cracks-down-on-password-sharing-allows-users-to-use-same-account-on-only-two-devices/articleshow/97548345.cms"> Swiggy One</a> or<a href="https://www.businessinsider.in/tech/apps/news/zomato-gold-re-launched-with-free-deliveries-vip-access-up-to-40-discount-on-dining-and-more/articleshow/97273088.cms"> Zomato Gold</a>. The increased platform fee is currently being tested in selected cities such as Delhi and Bengaluru. It is expected to be rolled out in a phased manner across all major cities. While an increase of ₹1 may seem insignificant to most people who place orders online, it adds up to a good source of revenue for Swiggy and Zomato which process lakhs of orders every day. Platforms such as Zomato and Swiggy aim to earn ₹1.25 to ₹1.5 crore per day through platform fees. <h2>Customers not happy</h2>Customers have not reacted positively to this news. Posts on platforms like X have criticised this move, calling for users to directly order from restaurants. <div type="twitter" handle="trippyankit" handlename="trippyankit" favoritecount="0" retweetcount="0" id="1812756936669921328"></div> The user highlighted that food prices are already comparatively higher on food delivery platforms. The difference in price is due to the commission paid by restaurants to Swiggy and Zomato, which usually ranges between 20 to 30%. <h2> Zomato share price surges</h2>Zomato’s share price increased by 3% to close at ₹229.10 on Monday after the company increased the platform fee. The company’s share price has increased by over 70% in the last six months, helping the company’s chief executive officer (CEO)<a href="https://www.businessinsider.in/stock-market/news/zomatos-deepinder-goyal-joins-elite-list-of-indian-billionaires/articleshow/111747793.cms"> Deepinder Goyal</a> become a billionaire. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/webstories/iqoo-z9-lite-5g-with-90hz-display-5000mah-battery-launched-starting-at-10499/slidelist/111754545.cms">iQOO Z9 Lite 5G with 90Hz display, 5000mAh battery launched starting at ₹10,499</a> <a href="https://www.businessinsider.in/tech/mobile/news/global-smartphone-shipments-grow-6-5-in-q2-2024-xiaomi-records-highest-growth/articleshow/111749023.cms">Global smartphone shipments grow 6.5% in Q2 2024, Xiaomi records highest growth</a> <a href="https://www.businessinsider.in/stock-market/news/ipos-this-week-four-ipos-to-hit-the-street-this-week/articleshow/111745283.cms">IPOs this week – four IPOs to hit the street this week</a>

Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier

<keyword id="19896956" type="General" weightage="100" keywordseo="Swiggy" source="keywords" meta.keywordsubtype="org" meta.entityname="Swiggy" meta.hostid="261" meta.entityid="Swiggy">Swiggy</keyword>’s stock market debut has been awaited for a long time and recent reports suggest that the Bengaluru-based company is expected to raise more than USD 1 billion through its IPO. Reports also suggest that the company might soon file its draft red herring prospectus (DRHP) with the <keyword id="19901204" type="General" weightage="20" keywordseo="Securities-and-Exchange-Board-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Securities and Exchange Board of India" meta.hostid="261" meta.entityid="Securities and Exchange Board of India">Securities and Exchange Board of India</keyword> (Sebi), potentially launching its IPO as early as this week. Meanwhile, Swiggy has been busy implementing several notable changes across its operations, probably to gear up for its IPO. From changing leadership to expanding Instamart’s reach, let us take a look some changes implemented by Swiggy in the last few months. <h2>Leadership overhaul </h2> One of the most significant shifts has been at <keyword id="19939135" type="General" weightage="20" keywordseo="Swiggy-Instamart" source="keywords">Swiggy Instamart</keyword>, the company's quick commerce arm. Swiggy appointed <keyword id="22954620" type="General" weightage="20" keywordseo="Amitesh-Jha" source="keywords">Amitesh Jha</keyword>, a seasoned executive from Flipkart, as the new CEO of Instamart last month. This move marks the third leadership change for Instamart in just 18 months. As part of this transition, Phani Kishan, the outgoing head of Instamart, was announced to take on a broader role within Swiggy, overseeing the Central Growth unit and working closely with co-founder Sriharsha Majety on new initiatives. <h2>Expanding Instamart’s reach </h2> Swiggy Instamart has also been on an expansion spree, recently launching in 11 new cities across India, including Rajkot, Thrissur, and Kanpur. This expansion marks a strategic push into Tier 2 and 3 cities, broadening its customer base beyond metropolitan areas. The platform, which offers delivery of daily essentials in just 10 minutes, also said in a press release that it has seen encouraging results in these new locations. In Mangalore, for example, a new store achieved 1,000 orders in a single day faster than many larger cities. This localised approach, featuring partnerships with regional vendors, has enhanced Instamart’s appeal and efficiency in serving diverse customer needs. "Users across India already recognise the convenience Swiggy provides," Amitesh Jha said in a press release and added, "The enthusiastic demand from smaller towns and cities has been incredibly encouraging. Our expansion into these new locations marks a significant milestone, allowing even more people to experience the ease of having thousands of products—from everyday essentials to electronics and toys—delivered in just 10 minutes from both national and local brands." <h2>Changes in management </h2> Swiggy has also made notable changes in its management team recently. Himavant Srikrishna Kurnala, previously with Reliance Retail’s JioMart, was appointed as the head of product for Instamart earlier this year. His appointment is part of a broader strategy to strengthen the team ahead of the IPO. Other key hires include Mayank Rajvaidya, who has been named vice president of fruits and vegetables, and Manu Sasidharan, who joined as associate vice president of the FMCG category. These additions come in the wake of several high-profile departures from the company, signalling a recalibration of Swiggy’s leadership structure. <h2>Policy changes for restaurant partners </h2> Swiggy’s founder recently revealed that the decade-old startup partners with over 3 lakh restaurants today. And thus, when a policy change decision was announced that impacted restaurant partners directly, it made headlines. In a move to standardise its service fees, Swiggy extended its gross value service fee policy to restaurants in non-metro areas. This change, effective from August 14, involves charging a service fee on the gross value of orders, including GST and packaging fees. This adjustment was expected to lead to an increased commission for restaurant partners in smaller towns and cities. The policy shift aligns with the fees already applicable to restaurants in larger urban areas and reflects Swiggy’s efforts to streamline its revenue model. <h2>Converting into a public limited company </h2> To facilitate its upcoming IPO, Swiggy also transitioned from a private limited company to a public limited company. Earlier this year, Swiggy updated its name to <keyword id="23191546" type="General" weightage="20" keywordseo="swiggy-limited" source="keywords">Swiggy Limited</keyword>, removing the term 'Private' to better align with its public offering aspirations. This strategic move was intended to prepare the company for public investment and enhance its market presence. As Swiggy readies itself for its IPO, these changes underscore the company's commitment to growth, innovation, and adaptability. The upcoming listing marks a significant milestone in Swiggy’s journey, reflecting its ongoing evolution and strategic realignment in the competitive food delivery landscape.

Swiggy is preparing for its IPO soon: A look at some recent changes in the company

Both online <keyword id="6376068" type="General" weightage="20" keywordseo="Food-Delivery" source="Orion">food delivery</keyword> platforms charge some money from customers in the name of delivery fees. There is often a dispute between tax officers and food delivery apps regarding the delivery fee, which involves nearly Rs 1000 crore, according to the reports. When reached for a comment, <keyword id="830092" type="General" weightage="20" keywordseo="Zomato" source="Orion">Zomato</keyword> refused. <keyword id="6358977" type="General" weightage="20" keywordseo="Swiggy" source="Orion">Swiggy</keyword> did not comment either. As per Zomato and Swiggy, 'delivery charge' is nothing but the cost borne by the delivery partners who go to deliver food from door to door. Companies simply collect that cost from customers and pass it on to delivery partners. But, tax officials do not agree with this, as per the reports. Last month, Swiggy increased the platform fee from Rs 2 to Rs 3 for food orders. A Swiggy spokesperson told IANS, that "there has been no significant change on platform fee, which is applied by most service players and is a common practice across industries". In April, the company introduced a platform fee of Rs 2 per order, irrespective of the cart value. In August, Zomato also increased its platform fee to Rs 3 per order from an initial Rs 2. Zomato started charging the platform fee from Zomato Gold users, who were previously exempted.

Zomato, Swiggy slapped with Rs 500 crore GST each: Report

<ul><li>The <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword> will be tabled by the finance minister Nirmala Sitharaman on July 23.</li><li>The <keyword id="20081557" type="General" weightage="20" keywordseo="auto-industry" source="keywords">auto industry</keyword>’s expectations from the Budget 2024 include FAME 3 scheme, incentives for hybrids and more.</li><li>Here are the key expectations from the auto industry for the Budget 2024.</li></ul> The Budget 2024 is set to be tabled on July 23 by the finance minister Nirmala Sitharaman and like each sector, the Indian auto industry also has set a lot of expectations from the Narendra Modi-led government’s first budget of its third term. From a boost to electric vehicles to infrastructure development, the auto sector has a series of expectations that it hopes will be addressed in the upcoming budget. This article delves into the key budget expectations of the auto industry in India <h2>FAME 3 scheme</h2>The Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME 2) has been integral for the electric vehicle (EV) makers as it has helped keep EVs affordable for the common man. With the government<a href="https://www.businessinsider.in/business/auto/news/government-is-reportedly-reworking-the-fame-ii-scheme-to-ensure-companies-use-domestic-components/articleshow/93752352.cms"> reworking</a> the FAME 2 scheme and then<a href="https://www.businessinsider.in/business/auto/news/electric-scooters-get-a-price-hike-of-up-to-16000-as-fame-subsidy-ends/slidelist/109136771.cms"> ending the scheme</a>, the prices of EVs have increased. <div type="Article" hostid="261" msid="111573138" title="Union Budget 2024: When will it be presented, what time, where to watch and what are various sectors expecting?" mstype="2" mssubtype="0"></div> With Budget 2024, EV makers will look towards the government for the FAME 3 scheme. The government is expected to announce the FAME 3 scheme with an outlay of ₹10,000 crore. While the exact details of the scheme will only be known once the budget is announced, it will be aimed at boosting demand by subsiding the cost, while also promoting local manufacturing of key components. “In the upcoming budget, we advocate for initiatives and subsidy structures without segment caps which will in turn foster innovation and growth across multiple segments. Recent discussions surrounding the implementation of FAME 3 present a notable opportunity to enhance EV adoption in India,” said Niraj Rajmohan, CTO and Co-Founder, Ultraviolette. "Proposed measures to promote e-buses and enhance payment security are crucial for accelerating sustainable transportation. Comprehensive support for the entire EV ecosystem is essential. Anticipated policy reforms like FAME-III and increased funding for critical EV segments will foster holistic industry growth," said Kartikey Hariyani, Founder and CEO, Charge Zone. <h2>Petrol and diesel under GST</h2>One of the frequent demands recently has been to bring petrol and diesel under goods and services tax (GST) to bring the fuel prices under control. Oil Minister Hardeep Singh Puri has said that the government will try to bring petrol and diesel under GST. At present, the central government levies excise duty on petrol and diesel, while the state government imposes value-added tax (VAT) and sales tax. <h2>Incentives for hybrids</h2>While electric vehicles have long been subsidised by both state and central governments, hybrids have not received the same love. Union Minister Nitin Gadkari had earlier this year<a href="https://www.businessinsider.in/business/auto/news/gadkari-vows-to-eliminate-petrol-diesel-vehicles-in-india-bats-for-lower-tax-for-hybrid-cars/articleshow/108936085.cms"> pitched</a> for lower GST on hybrid vehicles. “The proposal to reduce GST on hybrid vehicles to 5% and to 12% for flex engines has been sent to the Finance ministry which is considering the requisition,” Gadkari said. Companies like Maruti Suzuki have a strong presence in hybrids and have a lot to gain from incentives, while companies like Tata Motors who do not have hybrid technology may take a hit on EV sales. With the government looking to reduce dependence on petrol and diesel cars, hybrids may finally get some incentives in the upcoming budget. The UP government has already started offering incentives to select hybrid cars. <h2><keyword id="22433272" type="General" weightage="20" keywordseo="vehicle-scrapping" source="keywords">Vehicle scrapping</keyword></h2>Industry bodies such as the Society of Indian Automobile Manufacturers (SIAM) have sought incentives for vehicle scrapping. These are vehicles that have crossed a certain age and are being scrapped keeping in mind the pollution. While a policy is already in place, the stakeholders are looking for increased incentives, especially for commercial vehicles such as trucks and buses, which account for most of the emissions. <h2>PLI scheme</h2>Automakers are also looking for increased incentives under the Production Linked Incentive (PLI) scheme, for both ICE and EVs. Companies want the scheme to be expanded to more components, including tyres, which have seen a lot of changes. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/the-biggest-ipos-in-indias-history-lic-to-paytm-companies-that-have-raised-the-most-funds/articleshow/111690863.cms">The biggest IPOs in India’s history – LIC to Paytm, companies that have raised the most funds</a> <a href="https://www.businessinsider.in/business/auto/news/its-raining-discounts-maruti-suzuki-hyundai-tata-motors-and-others-offer-discounts-on-cars-as-sales-slowdown/articleshow/111688501.cms">It’s raining discounts – Maruti Suzuki, Hyundai, Tata Motors and others offer discounts on cars as sales slowdown</a> <a href="https://www.businessinsider.in/business/news/zomato-and-swiggy-increase-platform-fee-by-20-food-deliveries-to-get-costlier/articleshow/111758782.cms">Zomato and Swiggy increase platform fee by 20% – food deliveries to get costlier</a>

Budget 2024 Expectations: FAME scheme, aid for vehicle scrapping and other expectations of the auto industry

<ul><li><keyword id="830092" type="General" weightage="20" keywordseo="zomato" source="Orion">Zomato</keyword> and <keyword id="6358977" type="General" weightage="20" keywordseo="swiggy" source="Orion">Swiggy</keyword> will be liable to collect <keyword id="6354679" type="General" weightage="20" keywordseo="gst" source="Orion">GST</keyword> on online orders of food, instead of restaurants.</li><li>We don’t tax platforms like Amazon because we understand that they are marketplaces, why such difference with food aggregators, asks EY’s Bipin Sapra.</li><li>The tax loss to the government due to alleged under-reporting by food delivery aggregators is ₹2,000 crore over the past two years.</li></ul>India’s Finance Minister Nirmala Sitharaman on Friday announced that online food delivery platforms like Zomato and Swiggy will be the ones collecting goods and services tax (GST) from customers. The tax rate stays consistent at 5% and the ruling comes into effect on January 1, 2022. Earlier, it was the responsibility of the restaurants to do the same. It did seem pretty fair though, given that restaurants were the ones actually serving the customers while these new age platforms only facilitated online ordering. But it is what it is and the tax experts are not too impressed with it. The partners of renowned law and consultancy firms agreed that taxing platforms like Zomato and Swiggy was not the right way to go about this. “Are we asking Amazon and others to pay the tax? No, because we understand that separate from where there is a buy and sell,” EY’s Bipin Sapra said, adding that food delivery platforms work in a similar manner. But before we form an opinion about it, it is important to understand what this hullabaloo is all about. ‘It’s transfer of responsibility, not an add on tax.’ A customer pays a GST of 5% on each order they place, whether for dine-in or at-home delivery. The restaurants collect this GST because it is the one providing the services/product to the customers directly. The Indian government has now decided that restaurants would not be the ones collecting the taxes on online orders accepted through apps like Zomato and Swiggy. Instead, these food aggregator businesses will be the ones doing so. “They've actually said that these electronic commerce operators would be paying the tax on behalf of restaurants that are supplying customers through their platform. It is like a transfer of responsibility. The restaurant is not required to pay that, but yes they will continue to pay the tax for the offline sales,” PwC’s Anita Rastogi said in an exclusive interaction with Business Insider. Therefore, it doesn't really have much of an implication on customers in many cases as the GST rate stays the same. In some, it does. ‘I already pay GST on order, why do I care who collects it?’ While the government of India is yet to issue further clarification on the new GST norms for Zomato and Swiggy, the current facts have actually made the platforms quite redundant. If restaurants are not supposed to collect GST on online orders, does this mean that placing an order directly from the restaurants will be cheaper than placing it through these platforms? “If I order from a dhaba [roadside restaurant] next door and there is a 5% tax that Zomato charges, but if I call him directly, I don't have to pay 5% tax... Then that brings in inefficiencies and then takes away the whole purpose of having these platforms who are pushing the smaller players to reach a bigger audience,” Chilana &amp; Chilana Law Office’s Sandeep Chilana said. Even the tax experts or the platforms themselves are not too sure about how the government plans to play it out. Both Zomato and Swiggy have <a href="https://economictimes.indiatimes.com/tech/startups/swiggy-zomato-reach-out-to-govt-for-clarity-on-gst/articleshow/86439373.cms" data-type="tilCustomLink">reportedly</a> reached out to the government, seeking more details on the GST being levied on them. They are worried that this could lead to tax cascading (tax on tax). Abhishek Rastogi, partner at Khaitan &amp; Co, also raised similar concerns. There is one thing for sure — you will have more tax on your plate now. Earlier, restaurants below certain thresholds were exempted from paying GST on online or dine-in orders. Thanks to the new policies, even those restaurants would be under the tax next and ordering from your nearest dhaba will get more expensive. ‘This is precisely why the government took this up’ Despite the increase in online ordering, the government of India has not been able to fill up its treasury at the same rate. “These restaurants were required to take the GST and pay the tax to the government, but somewhere down the line — through technology, artificial intelligence, etc — many of the restaurants are not paying this particular tax to the government,” Rastogi said. As per the <a href="https://www.business-standard.com/article/economy-policy/5-gst-on-food-delivery-apps-fuel-to-stay-out-of-ambit-key-decisions-121091701376_1.html">estimates</a>, the tax loss to government due to alleged under-reporting by food delivery aggregators is ₹2,000 crore over the past two years. ‘But is there any way out?’ “The simplest solution which can be implemented as soon as possible was tax collected at source (TCS),” Rastogi added. Tax collected at source (TCS) is the tax payable by a seller, which he collects from the buyer at the time of sale. Platforms like Zomato and Swiggy are liable to pay TCS of 1%, which highlights that the government had already taken cognisance of the issue. The experts agree that increasing the TCS was a much simpler and faster way to go about things here, instead of introducing a new tax altogether. SEE ALSO <a href="https://www.businessinsider.in/cryptocurrency/news/south-koreas-crypto-regulations-are-tightening-around-investors-and-exchanges-alike/articleshow/86426452.cms">South Korea’s crypto regulations are tightening around investors and exchanges alike</a> <a href="https://www.businessinsider.in/stock-market/news/paras-defence-and-space-technologies-ipo-gets-blockbuster-demand-from-investors/articleshow/86422668.cms">Paras Defence and Space Technologies IPO gets blockbuster demand from investor</a> <a href="https://www.businessinsider.in/business/news/experts-say-karnatakas-ban-on-games-of-chance-like-dream11-and-mpl-may-face-a-legal-test/articleshow/86419697.cms">Experts say Karnataka’s ban on games of chance like Dream11 and MPL may face a legal test</a>

India needs to review how it wants to extract tax from Zomato and Swiggy

New Delhi, March 31 () Food ordering and delivery platform Swiggy on Tuesday said it has set up a relief fund called 'Swiggy Hunger Savior Covid Relief Fund' for the safety and welfare of its delivery partners and their families. The corpus for the fund will be created by Swiggy with primary contributions from the founders, senior leaders, employees and investors, as well as donations from customers and well-wishers, Swiggy said in a statement. As a start, Swiggy Chief Executive Officer Sriharsha Majety has committed 50 per cent of his annual salary towards this fund, it added. The company aims to raise Rs 10 crore for this fund and has already raised over 4 crore through initial contributions from Swiggy, its founders and employees, Swiggy said. "To assist our delivery heroes during these testing times, we have initiated this special fund which will be supported by Swiggy and our investors. I am overwhelmed by this collective initiative to support one another while also doing what we do best, which is serving customers," Majety said. Through the fund, delivery partners are now covered with Income-Protection Insurance where up to 14 days of income is insured if tested positive with COVID-19, the statement said. The fund will also be used to provide sustenance support through food and grocery care packages to the partners and their families who are facing hardships, it added. AKT HRS

Swiggy establishes COVID-19 relief fund for delivery partners, their families

<ul><li><keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword> will soon launch an online marketplace to help its restaurants procure eco-friendly packaging easily.</li><li><keyword id="6358977" type="UNKNOWN" weightage="20" keywordseo="swiggy">Swiggy</keyword> runs an initiative called Swiggy Packaging Assist with paper and glass as alternative options. </li><li>Prime Minister Narendra Modi has set the aim for 2022 to eradicate the use of single-use plastics.</li></ul>A restaurant owner in Delhi’s Rohini area has signed out of a food aggregator platform and asked a customer to come to the outlet with a tiffin box to collect food. What might sound like a funny incident, was actually a noble thought – the hotelier didn’t want to use plastic for <keyword id="6376068" type="UNKNOWN" weightage="20" keywordseo="food-delivery">food delivery</keyword>. While the Indian government might not have gone ahead with the <keyword id="6570438" type="UNKNOWN" weightage="20" keywordseo="single-use-plastic">single use plastic</keyword> ban, Prime Minister Narendra Modi aims to eradicate the use of single-use plastics by 2022. And, it seems to have turned people wee bit conscious. If you order food online from Zomato, Swiggy, <keyword id="2960214" type="PERSON" weightage="20" keywordseo="ubereats">UberEats</keyword> or others, you would know about the plastic wrapping that comes along with the food – from the signature tape to plastic boxes. But aggregators are aware of the rising use of plastics by restaurant partners. Now, they are beginning to take up an active role. A marketplace for alternative packaging Two years back, Zomato was one of the first to come with an option called ‘don’t send cutlery’. The foodtech unicorn is also working with research-based start-ups and firms to introduce high quality, eco-friendly packaging. “For a wider use-case, we will soon be launching an online marketplace (akin to an e-commerce portal), employing our network of suppliers for restaurants to easily procure eco-friendly packaging. Packaging offered which will include a segment of 100% naturally biodegradable units, largely consisting of sugarcane bagasse, bamboo, palm leaf and paper solutions,” said a Zomato spokesperson. Taking charge Meanwhile, Swiggy has been running a marketplace called Swiggy Packaging Assist for over a year now. “Packaging Assist enables restaurant partners to get access to a variety of packing solutions including (but not limited to) eco-friendly packaging options made of materials such as paper and glass. Hundreds of our restaurant partners across cities have slowly started using greener packaging solutions when possible,” said a Swiggy spokesperson. Swiggy said that it took up Extended Producer Responsibility (EPR) for 100 tonnes of plastic a month, and will grow six times over in the next six months. Zomato and Swiggy’s rival – UberEats educates its restaurant partners about the importance of right packaging. “We firmly believe that food delivery platforms can play a major role to empower restaurants and local businesses with sustainable packaging and encourage implementation of economical, plastic free packaging / eco-friendly options,” said Uber Eats.

Zomato and Swiggy sell eco-friendly packaging to restaurants, to avoid single-use plastics

<ul><li>The 45th meeting of the <keyword id="6355040" type="General" weightage="20" keywordseo="gst-council" source="Orion">GST council</keyword> has clarified matters pertaining to the rate of <keyword id="6354679" type="General" weightage="100" keywordseo="gst" source="Orion">GST</keyword> applicable on several services.</li><li>This includes cloud kitchens, alcoholic liquor, ice cream parlours among others.</li><li>Check out the latest news and updates on <a href="https://www.businessinsider.in/">Business Insider</a>.</li></ul>The <keyword id="6359833" type="General" weightage="20" keywordseo="goods-and-services-tax" source="Orion">Goods and Services Tax</keyword> (GST) regime was introduced in 2017 in India to simplify the consumption-based tax system, but several dozens of issues and complexities remain in the system more than four years after its introduction. One of the reasons behind this is the ever-evolving business landscape – for instance, while cloud kitchens have been around in informal setups for a long time now, the formal sector has only caught up recently largely due to the Covid-19 pandemic. With many of these cloud kitchen companies coming under the ambit of GST due to an explosion in popularity, it’s important to understand how the government looks at them, so they can collect GST at the applicable rate. To clear the confusion and clarify what rate of GST is applicable on many of these services, the government has issued a circular that goes into each category’s detail. Here is a summary: <cmsannotation type="cmsannotation" annotationid="Cloud kitchens are restaurants" comment="subhead" text="Cloud kitchens are restaurants">Cloud kitchens are restaurants</cmsannotation> The GST council has clarified in its circular that cloud kitchens provide the same services that a restaurant does, and as such, they would be covered under the definition of a restaurant under the act. This includes regular restaurants, cafes, takeaway services, room services and food delivery services. This means that cloud kitchen firms will have to charge GST at the rate of 5%, without taking any input tax credit (ITC), under the GST composition scheme. Alternatively, they can charge GST at the rate of 18% if they want to claim input tax credit. <cmsannotation type="cmsannotation" annotationid="Ice cream parlours are not restaurants" comment="subhead" text="Ice cream parlours are not restaurants">Ice cream parlours are not restaurants</cmsannotation> Another important aspect that affects consumers directly is whether ice cream parlours are to be considered as restaurants or not. The council observed that ice cream parlours do not engage in any form of cooking at any stage, and as such, are not covered under the scope of restaurants. It noted that these parlours sell already-manufactured ice cream. As such, this would attract GST at 18% and not 5%. <cmsannotation type="cmsannotation" annotationid="Amusement parks with rides" comment="subhead" text="Amusement parks with rides">Amusement parks with rides</cmsannotation> The council clarified that amusement parks, which have casinos or race clubs, will have to charge GST at the rate of 28% on the services provided by them. However, if these parks do not have casinos or race clubs, or if they do not provide access to them, the applicable GST rate will be 18%. <cmsannotation type="cmsannotation" annotationid="Coaching services to students with disabilities" comment="subhead" text="Coaching services to students with disabilities">Coaching services to students with disabilities</cmsannotation> The council clarified that coaching institutes and non-governmental organisations (NGOs) which provide coaching services under the central government’s “Scholarships for students with disabilities” scheme are exempt from GST, and as such, there will be no GST on the coaching services offered by them. <cmsannotation type="cmsannotation" annotationid="Alcoholic liquor is not food" comment="subhead" text="Alcoholic liquor is not food">Alcoholic liquor is not food</cmsannotation> Firms which manufacture alcoholic liquor for human consumption for brand owners will have to charge GST at the rate of 18%. A clarification was sought whether alcoholic liquor is covered under the definition of food and food products, and the GST council underlined that alcoholic liquor is excluded from the purview. As such, this would attract GST at 18% and not 5%, which is otherwise applicable on food and food products. SEE ALSO: <a href="https://www.businessinsider.in/policy/legal/news/can-you-claim-input-tax-credit-on-csr-expense-three-authorities-have-two-different-rulings/articleshow/86609122.cms">Can you claim input tax credit on CSR expense ⁠— three authorities have two different rulings</a> <a href="https://www.businessinsider.in/policy/legal/news/sc-landmark-ruling-in-the-samsung-heavy-industries-case-could-have-a-positive-effect-on-ease-of-doing-business-in-india/articleshow/77148341.cms">Supreme Court’s landmark ruling in the Samsung Heavy Industries case could have a positive effect on ease of doing business in India</a> <a href="https://www.businessinsider.in/policy/legal/news/these-are-the-common-laws-that-you-may-be-inadvertently-breaking-in-india/slidelist/76638782.cms">These are the common laws that you may be inadvertently breaking in India</a>

Cloud kitchens are restaurants, ice cream is not food and other important clarifications that will affect GST rates

<ul><li>Corporate entities will not be able to reduce their tax burden by claiming input tax credit on corporate social responsibility activities.</li><li>This could also lead to confusion amongst corporate entities since AARs of different states have given contrary rulings in this regard.</li><li>Earlier, Uttar Pradesh AAR had allowed <keyword id="12201693" type="General" weightage="20" keywordseo="ITC-on-CSR" source="Orion">ITC on CSR</keyword> activities, while Kerala AAR took the contrary position.</li></ul>Input tax credit allows registered entities under <keyword id="6354679" type="General" weightage="20" keywordseo="GST" source="Orion">GST</keyword> to claim credit on the goods and services tax (GST) that they have paid while purchasing goods or services, which can be offset from the GST that they have to pay after making sales. However, input tax credit (ITC) can’t be claimed on expenses made towards corporate social responsibility (<keyword id="6354502" type="General" weightage="20" keywordseo="CSR" source="Orion">CSR</keyword>) activities, according to a new order from the Authority for Advance Rulings (AAR) ruling in Gujarat. There are two other rulings from the same authority and one of those allows the input tax credit on CSR. According to the provisions of Companies Act, 2013, companies with a net worth of ₹500 crore or more, or turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more, will have to mandatorily spend on CSR activities. The spend should be a minimum of 2% of the average net profit of the past three years. <cmsannotation type="cmsannotation" annotationid="The root of the problem" comment="subhead" text="The root of the problem">The root of the problem</cmsannotation> The primary issue here is whether CSR activities can be construed as “in course or furtherance of business”, that is, whether they are fundamental for a company to continue its business activities. However, the GST provisions do not define what exactly that would entail. For this purpose, the applicant in this case, Adama India Pvt. Ltd., relied on the provisions of Companies Act, 2013, to state that CSR activities are mandatory as per law, and not undertaking them would cause harm to the business. This, the applicant says, entitles it to take ITC on CSR activities. However, the Gujarat AAR referred to the Companies (CSR Policy) Rules, 2014, to state that CSR activities are not covered in activities “in the course or furtherance of business”. It also cited the provisions of Companies (CSR Policy) Amendment Rules, 2021, which provide a definition of CSR that excludes it from normal business activities. Essentially, the GAAR ruled that since CSR is specifically excluded from the scope of normal business activities, the applicant cannot take ITC on CSR activities. According to Ayush Mehrotra, one of the partners at Khaitan &amp; Co., this is likely to further increase litigation in GST. “The GST framework is wide enough to inter alia include activities without pecuniary benefits and those which are incidental or ancillary to main business. As such, the present ruling will only cause further litigation on GST which was otherwise expected to be a simpler and straightforward framework,” he told Business Insider. <cmsannotation type="cmsannotation" annotationid="Contrary AAR rulings put corporates in a bind" comment="subhead" text="Contrary AAR rulings put corporates in a bind">Contrary AAR rulings put corporates in a bind</cmsannotation> Gujarat AAR’s ruling is in contrast to that of the Uttar Pradesh AAR, which allowed the applicant to take the credit of Goods and Services Tax (GST) paid by the company while purchasing goods to be used for CSR activities. However, it is in line with the Kerala AAR, which passed a similar ruling in the matter of Polycab Wires donating flood relief items. “It is also noteworthy to highlight that since this ruling is in contradiction to prior rulings issued by competent authorities in other states, the urgent need for a national authority is once again being felt to ensure certainty of legal position,” Khaitan added further. The exclusion of ITC on CSR activities will mean that corporate entities will not be able to reduce their tax burden by claiming <keyword id="12201691" type="General" weightage="20" keywordseo="GST-input" source="Orion">GST input</keyword> credit. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/swiggy-tightens-focus-on-grocery-delivery-as-zomato-steps-out/articleshow/86582683.cms">Swiggy tightens focus on grocery delivery, as Zomato steps out</a> <a href="https://www.businessinsider.in/policy/legal/news/sc-landmark-ruling-in-the-samsung-heavy-industries-case-could-have-a-positive-effect-on-ease-of-doing-business-in-india/articleshow/77148341.cms">Supreme Court’s landmark ruling in the Samsung Heavy Industries case could have a positive effect on ease of doing business in India</a> <a href="https://www.businessinsider.in/policy/legal/news/these-are-the-common-laws-that-you-may-be-inadvertently-breaking-in-india/slidelist/76638782.cms">These are the common laws that you may be inadvertently breaking in India</a>

You Searched For "gst collection on swiggy delivery" and got 11 results

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