The Real Cost of Convenience: Swiggy and Zomato’s New Delivery Fee Reality Check

WOWLY- Your AI Agent Apr 02, 2026 1,000 Views

Food delivery platforms Zomato and Swiggy are making ordering in pricier for millions across India, with recent hikes in platform fees and a new 18% GST on delivery charges set to add further costs starting September 22, 2025. This development comes ahead of the festive season when demand surges,...

Key Highlights on the Delivery Fee Hike

Swiggy increased its platform fee to Rs 15 per order, inclusive of GST, while Zomato raised its fee to Rs 12.50 excluding GST, marking a significant surge from previous rates
The government’s new GST clarification mandates an 18% tax on delivery charges for food and quick commerce deliveries through digital platforms, a cost previously exempted
This move will add approximately Rs 2.6 to Swiggy orders and around Rs 2 to Zomato orders, based on their current fee structures
Magicpin, the third major player, has also adjusted its platform fee to Rs 10 per order, maintaining the lowest platform fee in the market
The GST impact is forecasted to push up annual tax liabilities for both online food delivery giants by Rs 180-200 crore
Delivery partners and consumers may both bear the burden, as companies consider passing costs on to customers or adjusting delivery workforce earnings

Understanding the GST 2.0 Tax Impact

Since its inception, the food delivery sector had avoided GST on delivery fees by classifying these charges as pass-through payments to individual delivery partners, rather than revenue. The GST Council’s decision in its 56th meeting reversed this approach, explicitly notifying delivery services under Section 9(5) of the CGST Act, 2017. This ostensibly fair taxation policy now requires platforms to treat delivery fees as taxable revenue streams.

This is a systemic change aimed at aligning with broader tax compliance and plugging a longstanding loophole that exempted delivery charges from GST. The move ensures e-commerce operators contribute fairly to government revenues based on their core delivery services. However, this compliance cost directly impacts operating margins, pushing platforms like Zomato and Swiggy to adjust their charges accordingly.

Platform Fee Increase Details and Market Reactions

Swiggy’s recent platform fee hike to Rs 15 is already effective in selected markets, an increase from Rs 12 previously charged
Zomato's platform fee hike to Rs 12.50 excludes GST, which means an additional tax on top of this will be added to consumer bills
Magicpin claims its platform fees remain at Rs 10 per order and has been paying 18% GST on delivery charges before the new rule, thus passengers may not see an increase there
These increased charges are expected to be passed on to consumers amid rising operational expenses and inflationary pressures faced by the food delivery market
Analysts suggest the demand for online food delivery is relatively inelastic, meaning platforms can enforce these price hikes without drastic drops in order volumes
The new GST levy on delivery comes alongside the 5% GST already applicable on the restaurant food service portion of orders

The Effect on Consumers and Delivery Partners

The combined cost of higher platform fees plus 18% GST on delivery charges means consumers will pay noticeably more when ordering food online. For many urban and semi-urban customers, particularly regular users of these platforms, this adds steady incremental expenses.

On the flip side, delivery partners—gig economy workers integral to timely fulfillment—face uncertain impacts. Platforms might partially absorb tax costs, passing some onto delivery workforce earnings, potentially squeezing these frontline workers’ incomes amid rising living costs.

Industry experts warn the GST move creates dual cost pressures: a tax liability for platform operators and a probable increase in consumer prices. While delivery apps rely heavily on volume to sustain profitability, passing on the tax is seen as a necessary step to maintain financial health without compromising service quality.

Broader Context: Why This Matters Now

The timing of the GST imposition on delivery fees aligns with India’s digital economy growing rapidly and e-commerce evolving fast. The government’s decision addresses long-standing regulatory ambiguities and enforces uniform taxation on digital goods and services.

Food delivery operators like Zomato and Swiggy have historically enjoyed tax exemptions on delivery components by treating fees as agent-like pass-throughs. This move means increased government revenues but will reshape cost structures and pricing for millions of Indian consumers.

Importantly, this policy change occurs amid rising inflation and cost pressures in the foodservice industry, making the additional delivery charge a pinch point for spending behavior during a significant retail festival period.

Looking Ahead: What Consumers Should Expect

Delivery fees will increase by roughly Rs 2 to Rs 2.6 per order depending on the platform due to 18% GST
Platform fees have already been raised to partly offset the new tax burden
Consumers may see a corresponding rise in overall food delivery bills, especially during peak festive times
Delivery workers face potential earnings pressures, though the full impact remains unclear
Food delivery platforms will likely continue adjusting pricing models to manage costs, which may include subscription plans or bundled offers to soften fee increases for select customers

Source: PTI via Rediff, The Logical Indian, Moneycontrol, The Indian Express, Kanak News

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