New GST Rule May Increase Costs for Zomato, Swiggy Orders

Starting September 22, 2025, food delivery platforms like Zomato and Swiggy will face an 18% Goods and Services Tax (GST) on delivery fees, following a decision by the GST Council to include local e-commerce delivery services under Section 9(5) of the CGST Act. Previously, these platforms often avoided GST on delivery charges by treating them as a “pass-through” to delivery partners. Now, the tax will apply regardless of how the fee is categorized, potentially raising costs for consumers or impacting company profits.

According toa report, Zomato’s average delivery fee of Rs 11-12 per order could result in an additional Rs 2 tax per transaction. For Swiggy, with an estimated delivery fee of Rs 14.5, the GST could add Rs 2.6 per order. Swiggy’s quick-commerce arm, Instamart, faces a smaller impact of about Rs 0.8 per order due to its lower Rs 4 delivery fee. Blinkit, owned by Zomato, is unaffected as it already includes GST in its delivery charges.

The new rule may force platforms to choose between absorbing the tax, which could reduce profitability, or passing it on to customers, potentially affecting demand. Morgan Stanley notes that the industry’s structure may allow companies to transfer the cost to consumers. Additionally, the clarification could resolve ongoing disputes over past GST demands from various state governments, though some cases may remain complex due to state-level variations.

The GST Council’s decision, announced by Finance Minister Nirmala Sitharaman, aims to streamline tax collection by making electronic commerce operators like Zomato, Swiggy, and Blinkit responsible for paying GST on behalf of unregistered delivery partners. Meanwhile, recent GST reductions on food and consumer goods could lower overall order costs, potentially offsetting the delivery fee hike and boosting demand for these platforms. Consumers may notice slightly higher bills, but the extent depends on how platforms adapt to the new tax structure.