Zomato and Swiggy shares are in focus today following reports suggesting a potential reduction in GST on food delivery services. According to CNBC sources, the GST Council is likely to discuss a proposal to lower the tax on delivery charges by e-commerce food platforms from 18% to 5% without input tax credit (ITC).
Currently, food delivery services managed by platforms such as Zomato and Swiggy are taxed at 18%, with no input tax credit available. CNBC sources added that the reduction, if approved, could align the tax structure for delivery services with that of restaurant services, which attract a 5% GST rate.
The GST Council is scheduled to meet on December 21, 2024, to address this matter along with broader taxability issues related to food delivery platforms.
This move, if implemented, is seen as a positive development for both Zomato and Swiggy, potentially reducing end costs for customers and increasing demand. Investors will keenly watch for updates post the council meeting.
