Do You Need to Pay GST for Your Restaurant Tied Up with Swiggy?
Running a restaurant with a tie-up with a popular online food delivery platform like Swiggy can significantly enhance your business reach. However, with this comes the responsibility to comply with various tax laws, including the Goods and Services Tax (GST). This article will delve into the necessity of GST for your restaurant, specifically in the context of Swiggy tie-ups, to help you stay compliant and navigate the complexities.
The Necessity of GST for Online Food Ordering Platforms
Supplying through e-commerce portals such as Swiggy requires compulsory GST registration according to the GST Act. This applies regardless of your turnover, reflecting the importance of tax compliance in today's business environment. The decision to obtain GST registration depends on several factors, including the size of your restaurant and your annual income.
Understanding GST for Restaurant Services
Restaurant services are considered taxable services under the GST Act. Generally, if your annual turnover is less than Rs 20 lacs, you are eligible for exemption from GST registration. However, this exemption does not extend to service providers who use e-commerce platforms like Swiggy. Hence, if you utilize Swiggy for ordering, GST registration is mandatory, irrespective of your turnover limit.
Swiggy and GST Registration
Online food ordering platforms like Swiggy allow businesses to sign up with them by making a declaration that their annual turnover is less than INR 20 lacs. This declaration is only applicable to businesses that do not already have a GST registration. If you are already registered with the GST network, you must share your GST number with the online platforms. However, for those meeting the eligibility criteria and not integrating with any e-commerce aggregator, you can sign a declaration stating your annual turnover is below the threshold and no GST registration is required.
Tax Implications for Restaurants on Swiggy
For food delivery services provided via platforms like Swiggy, the service tax is 18%, which is borne by the restaurants. It's important to note that these restaurants are not allowed to avail input tax credit on any input services used for the delivery process. On the other hand, if the restaurant is part of a hotel providing accommodation services, the GST applicable on the restaurant service is 18%, and input tax credit on input services is allowed.
Conclusion
Being a part of the digital ecosystem, whether through platforms like Swiggy or other e-commerce portals, comes with specific tax obligations. Understanding and complying with these regulations not only ensures legal compliance but also helps in building trust with your customers. If you are running a restaurant and tied up with Swiggy, it is crucial to consider the GST implications and take appropriate steps to comply.
Remember, staying informed and adhering to these rules will help you maintain a strong legal and ethical standing in the market. For further guidance, consult a tax expert or a legal advisor to ensure complete compliance with all relevant tax laws.