GST cut possible on food delivery, EVs and vehicles

Food aggregators like Zomato and Swiggy are likely to cut GST rates on electric vehicles (EVs) and used vehicles in the upcoming GST Council meeting. According to sources, the currently applicable 18% GST on food delivery services may be reduced to 5%. However, the benefit of Input Tax Credit (ITC) will not be available with 5% GST.

Relief to food aggregators

If this proposal is implemented, ordering food from hotels and restaurants through food aggregators (Zomato, Swiggy) may be cheaper. According to this:

• Current GST rate: 18%
• Probable new rate: 5% (without ITC)
• Effective date: January 1, 2025

As an option, 5% GST instead of 18% can also be applied on hotels with room rent above Rs 7500.

Relief possible on EVs and small vehicles

Relief for electric vehicles (EVs) and old vehicles may also be discussed in the GST Council meeting:

• Possibility of 18% GST on resale of EVs and old vehicles.
• Relief possible in cess on SUVs also. Currently, 22% cess is applicable on SUVs, the effective date of which was July 2023.

Relief on card payment

There is a possibility of relief in GST rate on card payments up to Rs 2,000. However, this relief may be limited only to RBI regulated payment aggregators.

• 18% GST will remain applicable on payment gateway services.