GST Council Imposes 18% Tax on Delivery Fees: What It Means for Zomato, Swiggy, Zepto, Blinkit and others

The GST Council has announced that delivery fees charged by food delivery and quick commerce platforms such as Zomato, Swiggy, and Blinkit will now attract an 18% Goods and Services Tax (GST). The decision comes into effect from September 22, 2025, and marks a major shift in taxation for India’s booming online food delivery industry.

Until now, these companies had treated delivery fees as pass-through charges, meaning no GST was levied directly on them. The new notification makes platforms themselves liable to collect and remit the tax.

Financial Impact on Companies

Brokerage estimates suggest this decision could cost companies like Zomato and Swiggy around ₹180–200 crore annually.

For Zomato, analysts at Morgan Stanley estimate an additional ₹2 per order in costs, given its current average delivery fee of ₹11–12.

For Swiggy, which charges about ₹14.5 per order, the extra cost is expected to be ₹2.6 per order.

Blinkit, Zomato’s quick commerce arm, is largely unaffected, since its delivery fees were already taxed under GST.

This new burden comes at a time when platforms are chasing profitability while also trying to grow aggressively in a highly competitive market.

Stock Market & Analyst Reactions

The markets responded cautiously: Swiggy shares fell 1.5%, while Eternal Ltd.—the parent company of Zomato—ended almost flat.

Brokerages, however, see limited long-term damage:

Jefferies called the move a “slight negative” but highlighted that costs can be passed through to users.

Morgan Stanley agreed, noting that the industry’s current structure makes it easier for platforms to shift additional costs to consumers.

Motilal Oswal retained its bullish stance, with “buy” ratings and price targets implying upside potential of 30% for both Swiggy and Zomato, driven by festive demand and consumption growth.

Resolution of Past GST Disputes

Importantly, the new GST notification could also help resolve pending disputes over past dues. Several state governments had raised demands for GST on delivery charges in previous years. With this clarification, analysts believe there is now a framework for resolution of older cases, though state-level litigations may still take time to settle.

Wider Impact on the Food Delivery Industry

The GST levy is another test for an industry that has become a major consumption driver in India’s digital economy. The additional cost, though small in absolute terms, could:

Push platforms to revise delivery fee structures.

Lead to higher customer charges, particularly during peak hours or low-order-value transactions.

Impact delivery partner payouts, depending on how companies decide to share the burden.

While the 18% GST on delivery fees introduces a fresh compliance burden and raises operating costs, its real impact is likely to be marginal. A ₹2 increase per order is not expected to significantly alter consumer behavior in urban markets, especially given the convenience-driven nature of online food delivery.

For companies like Zomato and Swiggy, the challenge will be balancing profitability and affordability. Passing on the cost to consumers seems inevitable, but the key will be to do so without eroding order volumes. Interestingly, the GST decision could also bring greater regulatory clarity and reduce uncertainty around tax disputes, which in the long run might actually strengthen the sector’s stability.