Food delivery likely to get costlier on platform fee hike, GST levy

Platform fees have emerged as an additional source of revenue for food delivery players in the recent past.

The hike in platform fees by Zomato, Swiggy and magicpin ahead of the festive season is set to make ordering food costlier for millions of users across the country, which is likely to rise further due to the 18 per cent GST levy on delivery charges from September 22.

Swiggy has hiked its platform fee to Rs 15, inclusive of GST, in select markets. Rival Zomato has raised its platform fee to Rs 12.50 (excluding GST), whereas the third-largest food delivery player, magicpin, has also revised its platform fee to Rs 10 per order, in line with broader industry trends, making it expensive for food delivery consumers.

Estimates suggest that the additional burden on account of 18 per cent GST to be levied on delivery charges from September 22 is expected to add roughly Rs 2 per order for Zomato users and Rs 2.6 for Swiggy customers.

E-mail queries sent to Swiggy and Zomato by PTI seeking responses remained unanswered.

A magicpin spokesperson told PTI that it has already been paying 18 per cent GST on its food-delivery costs.

"Recent GST changes do not impact our cost structure. Thus, for consumers, there would be no impact of the GST increase. Our platform fees will remain at Rs 10 per order, which is also the lowest among major food delivery companies," the spokesperson added.

Platform fees have emerged as an additional source of revenue for food delivery players in the recent past.

The simultaneous hikes by Zomato, Swiggy and magicpin underline a growing trend of rising costs in India's food delivery sector, raising questions about whether affordability and convenience can still go hand in hand for millions of customers.