Zomato and Swiggy Slapped with Rs 500 Crore GST Each: A Deep Dive into the Legal Battle

Zomato and Swiggy, leading online food delivery platforms in India, are currently embroiled in a significant tax dispute with the Indian tax authorities. Each company has been issued a Goods and Services Tax (GST) notice for Rs 500 crore related to the classification of their delivery fees.

The Core of the Dispute

The dispute centers around nearly Rs 1000 crore, which pertains to the delivery charges these companies collect from their customers. Zomato and Swiggy argue that the ‘delivery charge’ is merely a pass-through of the costs incurred by their delivery partners. These partners are responsible for transporting food orders from restaurants to customers. The companies claim that these charges are collected from customers and then directly transferred to the delivery partners. However, tax officials have disagreed with this interpretation, leading to the issuance of the GST notices.

Fee Adjustments by Swiggy and Zomato

In the wake of this dispute, both Swiggy and Zomato have adjusted their fee structures. Swiggy increased its platform fee from Rs 2 to Rs 3 per food order. This change was described by a Swiggy spokesperson as in line with common industry practices. Zomato also followed suit, raising its platform fee to Rs 3 per order from the initial Rs 2. Notably, Zomato started applying this platform fee even to Zomato Gold users, who were previously exempt.

Implications and Industry Outlook

This ongoing dispute underscores the challenges that digital platforms face in terms of tax classifications and compliance, particularly in dynamic markets like India. The situation highlights the complexities in the digital economy, especially regarding how digital services are taxed and regulated. The outcome of this dispute could have significant implications for the business models of these companies, potentially impacting their pricing strategies and customer charges.

Conclusion

As Zomato and Swiggy navigate these regulatory challenges, the industry and consumers alike are keenly observing the developments. The resolution of this dispute will not only impact these two companies but could also set a precedent for how digital platform services are taxed and regulated in India.

Share:

MORE STORIES

## Navigating the AI Revolution: 5 Trending Google Ads Topics for Marketers As Google Ads continues its rapid evolution, staying ahead of the curve is paramount for digital marketers. The platform’s increasing reliance on artificial intelligence, shifting privacy landscapes, and the introduction of new campaign types are creating a fresh set of challenges and opportunities. Here are five top trending blog topics that delve into the most critical areas of Google Ads today. ### 1. The Rise of the Machines: Mastering AI-Powered Campaign Types Google is unequivocally betting on AI to drive the future of its advertising platform. A key area of focus for marketers is understanding and mastering AI-driven campaign types like Performance Max and Demand Gen. These campaigns automate targeting, bidding, and ad creation across Google’s entire inventory. A deep dive into strategies for providing the right inputs to these “black box” models, interpreting their performance, and understanding how to guide the AI for optimal results is a crucial topic for advertisers looking to succeed in this new era. ### 2. Beyond the Click: Navigating the New Landscape of Measurement and Attribution With the impending deprecation of third-party cookies and a growing emphasis on user privacy, the way advertisers measure success is undergoing a fundamental shift. This has propelled topics like enhanced conversions, consent mode, and the integration of first-party data to the forefront. Marketers are actively seeking guidance on how to implement these privacy-centric measurement solutions to gain a more accurate and holistic view of their campaign performance in a world without granular user tracking. ### 3. Creative is the New Targeting: Leveraging AI for Compelling Ad Experiences In an automated world, the creative has become a key differentiator. Google is investing heavily in AI-powered tools that can generate and optimize ad copy, images, and videos. Blog posts that explore how to effectively use these generative AI features to create a high volume of diverse and engaging ad creatives are gaining significant traction. This includes best practices for providing creative inputs, A/B testing AI-generated assets, and ensuring brand consistency across automated campaigns. ### 4. The Evolution of Search: Adapting to a More Conversational and Visual SERP The traditional keyword-based search is evolving. Users are increasingly employing longer, more conversational queries, and Google is responding with a more visual and AI-driven search engine results page (SERP). This shift requires a re-evaluation of traditional keyword research and bidding strategies. Trending discussions revolve around how to adapt to this new reality, including the role of broad match keywords, the importance of high-quality creative in visual search formats, and strategies for capturing intent in a more conversational search landscape. ### 5. Future-Proofing Your Strategy: The Growing Importance of a Full-Funnel Approach As automation takes over many of the manual levers within Google Ads, the focus is shifting towards a more strategic, full-funnel marketing approach. Advertisers are looking for insights on how to effectively use different Google Ads campaign types to guide users through the entire customer journey, from initial awareness to final conversion and retention. This includes discussions on how to structure campaigns to complement each other, allocate budgets across the funnel, and measure the impact of upper-funnel activities on bottom-line results.

Google Ads is in the midst of a quiet revolution—one driven by artificial intelligence, privacy-first regulations, and a rapidly changing search landscape. For digital marketers,

Send Us A Message