TAX LIABILITIES FOR ONLINE FOOD DELIVERY COMPANY

Share
Share This Thread
  1. Debajit Saha

    Debajit Saha New Member

    Dear Concern,

    Can you guide me what type of tax liabilities should be maintained for a online food deliver company (app based)?

    I am confused about the service tax..as I believe that Sale as food is not served at Restaurant and no other element of service such as ambience, live entertainment (if any), air conditioning or personalised hospitality is offered. Service tax can be levied if there’s an element of ‘Service’ involved which would typically be the case where food is served in Restaurant.

    Regards,
    Debajit Saha
     
  2. ZED

    ZED Well-Known Member

    Hello Debajit Saha,
    I concur with your views to the extent of say 99%, 1% disagreement because you believe that
    When the food is being delivered at home then this particular activity can be treated as a service. (free home delivery service)

    In my personal opinion, ST should not be levied because of other reasons you mentioned but since there is no clarity in law. I would not at all recommend to not to charge ST, well unless If CEO raises the demand against you for non levy/non payment of ST, and you would be willing to appeal against his order at your OWN COST (advocate fees, appeal fees, misc exp in respect of the case + risk of losing and consequent interest liability alongwith ST) that too up till you win , despite the fact that you can actually charge ST from your customer. :D
     
  3. Debajit Saha

    Debajit Saha New Member

    Thanks for your reply...

    Further I would like to know that how these company like Swiggy, Food Panda, etc...comes under taxation as they are only in food delivery business....and what other taxation should maintain for these kind of business (free food delivery)?

    Yes..!! if the company take the delivery charges from the customer then in that case I think ST will be applicable as in that case this is also a income for the service provider company.

    Looking forward your valuable comments.

    Regards
     
    ZED likes this.
  4. ZED

    ZED Well-Known Member

    They are called aggregators.
    They have been specifically defined under Service tax rules as per Rule 2(aa) of Service Tax Rules, it means a person, who owns and manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator.


    Who is liable to pay ST?
    In relation to service provided or agreed to be provided by a person involving an aggregator in any manner, the aggregator of the service:

    Provided that if the aggregator does not have a physical presence in the taxable territory, any person representing the aggregator for any purpose in the taxable territory shall be liable for paying service tax;

    Provided further that if the aggregator does not have a physical presence or does not have a representative for any purpose in the taxable territory, the aggregator shall appoint a person in the taxable territory for the purpose of paying service tax and such person shall be liable for paying service tax




    You might also be interested in reading the following article
    http://articles.economictimes.india...5_1_service-tax-service-providers-tax-revenue
     
  5. Neesha Bhatia

    Neesha Bhatia New Member

    Since the entity is the Aggregator they need to pay service tax under Notification No. 30/2012-ST as amended by Notification 7/2015-ST dated 1.3.2015, Service Tax for services provided or agreed to be provided by a person involving an aggregator in any manner shall be payable under reverse charge mechanism. 100 percent of Service Tax shall be payable by the aggregator.

    Definition of aggregator, following conditions are relevant –

    (a) Aggregator should be a person (as defined in section 65B (37) of Finance Act, 1994

    (b) Aggregator should own and manage a web-based software application

    (c) It should enable a potential customer to connect with persons providing service of a particular kind

    (d) Such connecting shall be by means of the web application and a communication device (say, mobile)

    (e) Services should be provided under the brand name or trade name of the aggregator

    Brand name or trade name can be a name or a mark such as –

    (i) invented word or writing,

    (ii) a symbol,

    (iii) monogram,

    (iv) logo,

    (v) label or

    (vi) signature

    Which is –

    (i) Registered or otherwise

    (ii) Used for the purpose of indicating or indicate a connection

    (iii) A connection between service and person using name or mark in course of trade

    and such connection is with or without indication of the identity of that person.
     
Draft saved Draft deleted
Loading...