The restaurants along with the food delivery sector have asked for the goods and service tax(GST) on the home delivery of foods and lessen to 5% from 18% so as to enhance the $3 billion division.
A 13% more price on similar food and beverages is being given by the customers with respect to the clients going to the restaurants who are giving 5% tax rates.
“The online food delivery sector in India has been growing by leaps and bounds. It is currently worth USD 2.94 billion and is growing at a CAGR of 22 %. However, the tax complications arising due to the Goods and Service Tax (GST) is likely to pose a roadblock to this growth,” Fooza food CMD comments Dibyendu Banerjea.
“The high GST rate of 18 % 
Grab the information of revised GST slab rates on consumer products in India, Although the GST council finalized the slab rates like 5%, 12%, 18% and 28%. Read more on online food delivery service providers and ineligibility of credit of such GST charged to the restaurants have an adverse impact on the growth of the sector. A reduction in GST rates will keep food costs affordable and create more jobs in the sector while furthering the government’s initiatives.”
But the owners of the restaurants said to the high commission of 23 to 24% through the food delivery platforms it is difficult to run the restaurant’s post to the unlock down, also the condition of the restaurants are not normal till now.
“For us, post-Covid lockdown our home delivery sales got revered to 60% which was 40% earlier. With inability to raise prices, our bottomline is getting hit for higher commission fees despite sales having reached closer to pre-covid levels,” comments Platter Hospitality director Shiladitya Chaudhury.
But he is confident that post to the few months when the vaccination arrives all across the country then the restaurants will again reach their normal position.
Mr. Banerjee comments “Scalability of business will be most impacted. Growth plans via new franchise outlets for marquee restaurants will be less feasible. In comparison to the five % GST on food bills, the GST on royalty and franchise fee is 18 %.”
