The notification dated November 18, 2021 has amended a previous notification dated June 28, 2017 wherein:
- A proviso in entry 15 to item (b) and (c) has been added whereby passenger transportation services mediated by an e-commerce platform in a non-air conditioned contract carriage or a stage carriage has been brought under the GST net.
- Proviso to entry 17 has been added whereby facilitating passenger transportation services by an e-commerce platform through auto rickshaws have also been made taxable (auto-rickshaw services were hitherto completely exempt).
This implies that the food aggregators / e-commerce platforms using transportation service like Zomato, Swiggy etc. are liable to pay tax on restaurant services effective January 1, 2022. The liability to pay taxes on the non-restaurant services as per this directive still lies with the restaurants themselves.
Restaurant service means supply a) by way of or as part of any service; b) of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint – including mess, canteen – whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied.
As per the latest notification, Zomato, Swiggy, etc. shall be responsible for charging, collecting, and paying GST at the rate of five percent on supply of “restaurant services” made by such restaurant through the e-commerce platform.