Higher platform fee may help Zomato pass on GST burden

The higher platform fee food delivery firm Zomato is will charge would partially offset the impact of GST on delivery charges, in case the company is liable to pay any, analysts have said.

GST authorities recently sent Zomato a show cause notice relating to an alleged tax liability of `401 crore, along with interest and penalty, for the period between October 2019 and March 2022.

CLSA analysts Aditya Soman and Vatsal Dujari wrote on Tuesday: “In case Zomato is liable to pay GST on delivery charges it collects, Zomato may use a combination of an increase in commission rates, higher AOVs (average order value) through an increase in menu prices or higher platform fees to pass on the GST to the consumer.”