India’s GST Council has rolled out an 18 percent tax on delivery charges for food platforms like Zomato and Swiggy, on top of the existing 5 percent levy on restaurant bills. This move from the recent 56th meeting in early September 2025 could raise costs for millions of users, while ride-hailing apps face ongoing confusion over taxes in their subscription setups.
Council’s Decision on Food Delivery Taxes
The council gathered last week to tackle tax gaps in e-commerce. They decided to impose the 18 percent GST on local delivery services handled by online platforms.
This tax applies to fees that apps charge for connecting customers with delivery partners. Platforms must now collect and pay this on behalf of gig workers, who often fall below tax thresholds.
Officials expect this to bring in substantial revenue. Estimates suggest an annual boost of around 180 to 200 crore rupees from major players alone.
The rule kicks in on September 22, 2025. Apps have started adjusting by raising platform fees, with some increasing charges by 2 to 5 rupees per order.
Customers might feel the pinch during busy festive times. Urban areas with high order volumes, like Mumbai and Delhi, could see the biggest impacts.
Impact on Zomato, Swiggy and Users
Food delivery giants argue they only facilitate connections, not provide the actual service. Yet the council views them as responsible for the tax.
This could force platforms to pass costs to consumers. Average orders might cost 5 to 10 percent more, based on current fee structures.
Gig workers worry about reduced tips or incentives. Some reports show drivers already facing lower earnings due to similar past changes.
Platforms have hiked fees recently. Swiggy now charges up to 15 rupees per order, plus GST, while Zomato is at 12.50 rupees.
- Higher delivery fees could push users to cook at home or pick up orders directly.
- Small restaurants might lose business if customers avoid apps.
- Quick commerce services like Blinkit face similar tax hits, affecting grocery deliveries.
Ride-Hailing Apps Seek Tax Clarity
Ride services like Uber, Ola, Rapido, and Namma Yatri remain in a bind over GST rules. The council did not address taxes on passengers in subscription models.
In these models, drivers pay fixed daily or weekly fees to apps. Passengers pay drivers directly, often skipping the 5 percent GST.
Platforms claim they act as mere connectors. This view clashes with some rulings that hold them liable for taxes.
The uncertainty affects millions of rides daily. Drivers prefer subscriptions for keeping more earnings, without high commissions.
Recent shifts show Uber adopting this for autos in February 2025. Rivals like Namma Yatri led the way, expanding to cabs last year.
Key Rulings and Model Differences
Legal debates center on advance rulings. A November 2024 decision from Karnataka said Uber must collect 5 percent GST even in subscription mode.
An earlier 2023 ruling exempted Namma Yatri, stating it does not directly provide transport. This split creates confusion across states.
Subscription models charge drivers flat fees, unlike commissions that take 20 to 30 percent per ride. This draws more drivers but raises tax questions.
Passengers benefit from lower fares without added GST. Yet if rules change, costs could rise, hurting affordability.
Here is a comparison of models:
| Model Type | GST on Passengers | Driver Fees | Typical Commission |
|---|---|---|---|
| Commission-Based | 5 percent | Up to 30 percent per ride | High |
| Subscription | Often none | Fixed daily/weekly | None |
Experts predict a final clarification soon, possibly in the next council meet.
Wider Effects on Gig Economy
These changes highlight India’s evolving gig work landscape. Over 15 million workers in delivery and transport sectors feel the ripple effects.
Government aims to ensure fair taxation and boost collections. But businesses call for uniform rules to avoid legal battles.
Recent events, like platform fee hikes before festivals, show quick adaptations. Users in cities report mixed feelings, with some switching apps for better deals.
Analysts tie this to broader economic trends, including inflation and consumer spending. If ride taxes clarify similarly, it could reshape urban mobility.
What are your thoughts on how these taxes might change your daily habits? Share in the comments and pass this along to keep friends updated.
