In a strategic cost-redistribution move that could reshape India’s food delivery economics, Zomato and Swiggy are confronting an additional GST burden of Rs 180-200 crore annually after the GST Council clarified that online marketplaces must pay 18% tax on delivery services provided by gig workers. The regulatory shift places delivery services under Section 9(5) of the CGST Act, fundamentally altering the cost structure for platforms that process millions of daily orders.
For restaurant industry stakeholders monitoring aggregator dynamics, this development represents more than tax compliance, it signals a pivotal moment where regulatory costs could accelerate the platforms’ ongoing strategy to optimize unit economics through strategic price adjustments and operational efficiency improvements.
Executives from both companies have indicated that the additional tax burden will likely be shared between delivery partners and consumers, demonstrating calculated revenue protection strategies that prioritize platform profitability over absorbing regulatory costs.
Platform fee adjustments provide immediate context for this regulatory burden. Swiggy increased its platform fee to about Rs 15 per order (including GST), marking its third hike in three weeks after successive increases from Rs 12 to Rs 13 and then to Rs 14. Zomato has also revised its platform fee from Rs 12 per order (including GST).
The burden-sharing approach demonstrates sophisticated revenue management that balances consumer price sensitivity with delivery partner retention requirements. For restaurant operators analyzing delivery partner dynamics, these adjustments could influence service quality and delivery speed as platforms optimize cost structures.
Ordering food through Zomato or Swiggy could potentially become costlier as both companies are staring at an additional GST burden of Rs 180–200 crore each year, though brokerages project that fee hikes, excluding GST, could have lifted adjusted EBITDA by Rs 270 crore for Zomato and Rs 200 crore for Swiggy through strategic pricing adjustments.
The GST clarification creates operational precedent for how platforms navigate regulatory changes while protecting core business metrics, providing restaurant partners insight into aggregator resilience and strategic adaptability during policy transitions.
