GST dept probing if restaurants escaped taxes on packaging charges: Report

According to reports, eateries are being questioned by the goods and services tax (GST) department to see whether they have avoided paying taxes on the "packaging charge." This follows a previous action taken by the tax authorities to reclaim GST on "food and delivery" charges.

This development resulted from the department's recent summons to various restaurants featured on food aggregator platforms such as Zomato, requesting that they provide information on the GST paid on packaging charges from January 1, 2022. According to the report, tax officials are unsure if the money has truly made it to the state coffers because of the GST on packaging fees that are collected from consumers.

This is due to the fact that service providers pay GST, which they collect from the client or entity that receives the service. In this instance, the supplier is required to pay taxes to the government and collect money from consumers who place food orders through such online platforms for the food, packing, and delivery.