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May 12, 2025

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Basics of GST

Reporting GST on Restaurant Services via Zomato & Swiggy in GSTR-3B

Swiggy and Zomato emerged as essential digital services for millions of Indians in today's modern world, as people rely on these platforms for the convenience of food delivery services, even though they prepare their meals less frequently. Each order of Swiggy or Zomato meals made through a cell phone tap triggers a cascading sequence of digital invoices, tax declarations, and technical administrative requirements.

Restaurant services offered through mobile applications now follow an updated reporting framework according to GST rules, which primarily impacts the GSTR-3B process. Most restaurants alongside cloud kitchen operators need to understand this regulatory shift because their industry survival demands both compliance and operating efficiency. The full significance of reporting GST to food delivery services becomes a matter for extensive analysis.

A Quick Throwback: How It Used to Work

Before January 1, 2022, restaurants operating through platforms like Zomato and Swiggy maintained their status as primary food suppliers. These platforms operated as basic middlemen who handled order completion and delivery arrangements alongside payment functions for restaurants.

In this older setup:

Restaurants charge 5% GST (without Input Tax Credit) on food.

Zomato/Swiggy charges a commission of + 18% GST (with ITC eligibility).

Restaurants file their returns in GSTR-3B and GSTR-1 based on their turnover.

But, as always, the government had its eyes on improving transparency and curbing leakages.

What Changed After Jan 1, 2022?

In January 2022, the GST Council ruled that food delivery platforms (Zomato, Swiggy, etc.) would themselves collect and remit the GST on behalf of the restaurants listed on them.

This means:

Zomato and Swiggy now collect 5% GST on each order.

Restaurants no longer collect GST for orders made through the platform.

Zomato/Swiggy will report this tax under Section 9(5) of the CGST Act.

In simple words, Zomato and Swiggy have become deemed suppliers for taxation.

Why Did the Government Make This Change?

The move was primarily aimed at closing revenue leakages. There were numerous reports of small restaurants, especially unregistered ones, not paying their share of GST correctly or failing to file returns at all.

This change ensures:

Better tracking of transactions via digital records

Consistent tax collection from the growing gig economy

Reduced administrative burden on smaller food businesses

Implications for Restaurants

Here’s what changed for restaurants, practically speaking:

Before Jan 2022	After Jan 2022
Charged GST on their invoices	No need to charge GST via Zomato/Swiggy
Reported Zomato/Swiggy sales in GSTR-3B	These sales no longer reflect in outward supplies
Responsible for GST collection	GST is collected and paid by the platform

However, sales made directly to customers (i.e., dine-in or takeaway) are still taxable in the restaurant’s hands. So, restaurants must now split their turnover between platform and non-platform revenue carefully.

How Zomato and Swiggy Handle GSTR-3B Reporting

Since platforms are now liable for GST, they must report:

All such food delivery transactions are under Table 3.1(a) of GSTR-3B (Outward taxable supplies)

GST collected @ 5% on behalf of restaurants under Section 9(5)

Their commission (service fee) is under 18% GST as usual

This bifurcation requires solid back-end accounting, and these companies have built integrated compliance systems to handle the volume.

A Look Inside GSTR-3B for Restaurant Owners (Post 2022)

Let’s say you own a small chain of cloud kitchens that sell:

40% through Zomato

40% through Swiggy

20% directly through your own app or counter sales

Here’s how you report:

Revenue Source	GST to be Charged?	Included in GSTR-3B?
Zomato Orders	No	No (Zomato files it)
Swiggy Orders	No	No (Swiggy files it)
Direct App Sales	Yes (5%)	Yes (reported by you)
Walk-in Customers	Yes (5%)	Yes (reported by you)

Many restaurant owners have misunderstood this and continued to include platform orders in their GSTR-3B, leading to reconciliation mismatches.

Common Mistakes in Reporting

Double Reporting: Including Swiggy/Zomato orders in GSTR-3B even after the change.

ITC Confusion: Assuming ITC is allowed on food inputs at 5% GST (it’s not).

Mismatch in Turnover: Not reconciling annual turnover between books and filed returns.

Ignoring Platform Invoices: Failing to account for the commission GST charged by Zomato/Swiggy.

Role of Input Tax Credit (ITC)

Here’s where it gets a little tricky. While restaurants under the 5% GST regime cannot claim ITC on food inputs, they can claim ITC on input services and goods used for administrative or operational purposes:

Packaging materials

Software services

Office rent (if GST is applicable)

Marketing services

Smart accounting can help optimise your ITC while remaining within compliance boundaries.

Practical Tips for Restaurants Filing GSTR-3B

Maintain Split Books: Separate sales data for aggregator and direct orders.

Download Monthly GST Invoices from Zomato/Swiggy: Reconcile commissions and ITC.

Avoid ITC on Food Inputs: Unless operating under 18% GST (not common).

Use GST Accounting Software: Manual filing can easily lead to errors.

Watch Out for GSTN Notices: Auto-populated data from Zomato/Swiggy may not match your own filings if not properly reconciled.

How Does This Affect Cloud Kitchens?

Cloud kitchens, restaurants without dine-in facilities, largely depend on Zomato and Swiggy for business. Since nearly 100% of their sales are through platforms:

They no longer need to pay GST on those orders.

Their main GST responsibility lies in recording commission expenses and reconciling ITC.

Their GSTR-3B filings now involve fewer outward supply entries but more on the inward supply side.

Annual Reconciliation and Audit

At year-end, it's crucial to match the following:

Turnover reported by Zomato/Swiggy under your GSTIN

Commission paid (cross-check ITC eligibility)

Total revenue in books vs revenue reported in GSTR-3B

If the numbers don’t align, you could get flagged for an audit or notice. Better safe than sorry.

What About Unregistered Restaurants?

Interestingly, even if the restaurant isn’t registered under GST, Zomato and Swiggy will still collect and pay GST on their behalf. This inclusion under Section 9(5) brings even the informal sector under the tax net, creating a more uniform taxation landscape.

However, unregistered entities won’t be able to claim ITC or file returns, which can disadvantage them in the long run.

Conclusion

The way we eat has changed dramatically over the last few years. With convenience being king, food aggregators have revolutionised how we access our favourite meals. But as the digital delivery ecosystem grows, so does the responsibility of staying tax-compliant.

Understanding GSTR-3B reporting in this new regime isn’t just about ticking boxes. It’s about ensuring that your business stays on the right side of the law while optimising every rupee of your hard-earned revenue. For restaurant owners, cloud kitchen entrepreneurs, and finance professionals in F&B, keeping up with GST norms isn’t just a best practice, it’s a business necessity.

As always, the devil is in the details, and when it comes to taxes, even the smallest oversight can cost more than just money. So take the time, understand the system, and file right.

FAQs

1. I run a small café and mostly get orders through Swiggy. Do I still need to charge GST on those sales?

Not anymore, at least not on the aggregator orders. As per the new rule (effective from Jan 2022), platforms like Swiggy or Zomato themselves collect and deposit the 5% GST. You only need to worry about charging GST on your direct orders, like walk-ins or sales through your website.

2. Should I include Swiggy/Zomato revenue in my GSTR-3B filings?

This one trips up a lot of folks. No, you shouldn’t include platform-based sales in your GSTR-3B under outward supplies. GST for those is already paid by the aggregator under Section 9(5). Including them again could lead to overreporting and mismatches during GST reconciliation.

3. Can I claim ITC on the commission charged by Zomato or Swiggy?

Yes, you can, but only if your business is GST-registered and you’re under a scheme that allows ITC (for example, not under the 5% composite rate for food services). Just make sure you have proper GST invoices from them and reconcile them monthly.

4. I still see a 5% GST line on Swiggy’s invoice. Is that my tax?

Good observation, but no, that’s not your GST. That 5% is collected by Swiggy and paid directly to the government. It doesn’t come to you, and you don’t account for it in your returns. You're hands-off when it comes to platform-side GST.

5. How do I track my income correctly if I’m not filing GST on these orders?

Great question. Even though you’re not reporting it in your GST returns, you must still account for the income in your books. Always tally the total payouts from the platform (post-commission) with their monthly invoices. It’s good for internal accounting and mandatory for annual income tax filings.

6. I have a cloud kitchen with 100% sales via Zomato. Do I still need to register under GST?

Technically, if your turnover crosses ₹20 lakh (₹10 lakh in some states), registration is mandatory, regardless of who collects GST. Even though Zomato handles the tax part, your registration ensures you can claim ITC on expenses like packaging, rent, or marketing. It’s worth considering, especially as you grow.

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