HomeRestaurant TrendsRestaurant News & UpdatesImportant GST Update For Restaurants

Important GST Update For Restaurants

As per the latest update shared by Swiggy, there has been a change in the GST compliance for restaurants.

Under Sec. 9(5) of the CGST Act 2017, Government has given a directive that: 

  • Taxes of restaurants on restaurant services to be paid by E-commerce platform (“ECO”) @ 5%; and 
  • Taxes on non-restaurant services like selling bakery items, sweets etc to be paid by the restaurant only

All compliance, like raising tax invoice, tax payments, GST, etc, for a restaurant with respect to its services will now be required to be met by the ECO.

This change excludes the restaurants that are tagged along with a hotel having a rack rate of more than Rs. 7,500 and restaurants/items that are classified as bakery, sweet, ice cream, etc. The exclusions will continue to be taxed as per the current scenario and the ECO shall not be required to undertake the compliance.

The above changes are proposed to be implemented by 1st Jan, 2022.


restaurant gst

Going forward, Swiggy plans to categorise restaurants mainly under three types:

  1. Restaurants, providing all restaurant services
  2. Non-Restaurants, providing single category items like bakery goods, sweets, ice-creams, etc
  3. Hybrid, a mixture of both

Swiggy will be handling the taxes on these three categories as mentioned below:

  • Restaurant category: All the existing food items which have 0% GST, will be priced at 5% GST after the new implementation. This will eventually lead to no change in revenue for a partner but since the overall price of the items to customers will increase hence it might lead to reduced sales.
    For example, if they are selling an item for Rs 100 (with 0% GST), after 31st Dec, 21’ item price to the end customer at Swiggy will increase to Rs 105 (100+5 (GST)).

    Another change will be that such Restaurants do not have to file GST anymore which reduces the operational cost at their end.
  • Non Restaurant category: All the Restaurants who do not have a valid GSTIN will be disabled on Swiggy platform. 
  • Hybrid Category: They need to file for partial GST for the items which are not at 5% GST. This does complicate the GST filing process for such Restaurants. 

Post 1st January 2022, Swiggy will reject all items in the menu update which will not have a GST value attached to it.


swiggy online ordering

Petpooja requests you to configure applicable taxes before 31st December, 2021. If your item/menu prices are inclusive of taxes, please configure backward tax. If you charge price plus tax, please configure forward tax. 

In case of any assistance, please feel free to contact us on +919099912483 or may write us on support@petpooja.com.

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8 COMMENTS

  1. Hi, We are running a hybrid model with Sweets (Non Restaurant) and Restaurant Items. How will Swiggy/Zomato differentiate between these items as Restaurant or Non Restaurant as on both 5% GST are applicable. Please help!

  2. I have opted for the cancellation of GST, since my total turnover is less than 20 lakhs in a year. So how will it work from swiggy’s point of view.

    GST is not mandatory, if the business is less than 20 lakhs.
    So have opted for the cancellation of GST.

    please update..

  3. Dear Sir we are a bakery and are under a regular tax payee of GST regime.

    We have configured all taxes as required.

    Now Bread has not been configured as bread attracts NIL Gst, but all these bread items have been removed by Zomato & Swiggy portals. Our breads contributed to a major sales on these platform.

    Please help.

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