GST & Indirect Tax

GST on Cloud Kitchens and Food Delivery Platforms: Calculator-Friendly Guide with Worked Example

📅 June 2026 GST Reviewed by CA Nikhil Gupta · 19 June 2026 Law in force as of 19 June 2026 ✔ cbic-gst.gov.in

Cloud kitchens and food aggregator platforms (Swiggy, Zomato) operate under a layered GST structure that changed significantly when the Government made aggregators liable to collect and pay GST on restaurant services. This guide explains who pays what GST, how input tax credit flows, and provides a worked calculation for a typical cloud kitchen operator.

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Quick answer: since January 2022, Swiggy and Zomato themselves pay 5% GST (in cash, no ITC) on restaurant-service orders placed through their apps, under Section 9(5) of the CGST Act - the restaurant does not charge GST on those orders. The restaurant/cloud kitchen only remains liable for GST on its own direct orders (own website, phone, WhatsApp), and cannot claim input tax credit either way because restaurant-service GST is ITC-blocked.

Use the Finin2min GST Services Rate Master to apply these points to your figures or facts.

GST Rate on Food Services

Supplier Type	GST Rate	ITC Available?
Restaurant (standalone, turnover < ₹1.5Cr, composition)	5% (no ITC)	No
Restaurant (regular GST, outdoor catering)	5% on food supply (no ITC on input services/capital goods)	Limited
Cloud kitchen (no dine-in) — regular taxpayer	5% on food supply (no ITC)	No (blocked for restaurant services)
MICE/catering in hotel (room tariff > ₹7,500)	18% with full ITC	Yes
Packaged food manufacturer (not restaurant)	0%–18% based on HSN	Yes (full ITC)

For the connected rule, example or next step, see GST Registration for Cloud Kitchens and Home Bakers: Practical Guide for Food Businesses.

GST on Food Delivery Platforms: Section 9(5), Not TCS

From January 2022, food aggregators (Swiggy, Zomato, etc.) became liable to pay GST on restaurant services supplied through their platforms, under Section 9(5) of the CGST Act — a notified-services reverse-mechanism that makes the ECO the deemed supplier. This is a separate mechanism from the Section 52 TCS (tax collected at source) that aggregators apply to other goods/services. Key mechanics:

The aggregator (Electronic Commerce Operator — ECO) charges and collects 5% GST from the customer on restaurant-service orders and deposits it with the government in cash (ITC cannot be used)
The restaurant/cloud kitchen does not charge GST on orders placed through the aggregator platform — the ECO raises the invoice for that order
For direct orders (own website, phone orders), the restaurant/cloud kitchen pays GST directly under normal forward charge
TCS under Section 52 (currently 0.5% IGST or equivalent CGST+SGST) does NOT apply to restaurant-service orders covered by Section 9(5) — TCS only applies to other goods/services sold through the same or other ECOs
The aggregator charges 18% GST on its own delivery commission/service fee — this is generally not creditable for the restaurant since restaurant-service ITC is blocked at 5%

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Section 9(5) vs Section 52 TCS: These are distinct mechanisms. Section 9(5) shifts the GST liability itself to the ECO for specified services (restaurant service, passenger transport, accommodation, housekeeping) — the ECO pays tax as if it were the supplier. Section 52 TCS requires ECOs to collect a small percentage as advance tax on supplies where the underlying supplier still pays GST. Restaurant-service orders through aggregators fall under Section 9(5), not TCS.

Worked Example: Cloud Kitchen Monthly GST Calculation

Case Study: SpiceBox Cloud Kitchen, Hyderabad

Monthly Revenue — ₹8 lakh

SpiceBox earns ₹5L via Swiggy/Zomato and ₹3L via direct orders (WhatsApp, own website). GST on Swiggy/Zomato orders is collected and remitted by the aggregators. SpiceBox must handle GST on the ₹3L direct orders only.

Aggregator orders (₹5L)

GST paid by Swiggy/Zomato; SpiceBox has no GST liability on these

Direct orders (₹3L)

5% GST = ₹15,000 due from SpiceBox

ITC on rent, packaging, utilities

Not available (5% food service — ITC blocked)

Net GST payment

₹15,000/month in cash (no ITC offset)

SpiceBox reports the ₹5L aggregator turnover in GSTR-1 under the dedicated ECO-supplies table for Section 9(5) restaurant services (Table 8/14(b), depending on the return-period format) — this turnover does not add to SpiceBox's own GSTR-3B tax liability since the ECO has already paid that GST. The ₹3L direct orders go in the normal B2C/B2B outward-supply tables (Table 7/4A) with 5% GST payable by SpiceBox. Commission paid to the aggregator (₹50,000 × 18% = ₹9,000 GST) is also not creditable due to the restaurant ITC block.

Registration Threshold for Cloud Kitchens

Section 24(ix) of the CGST Act mandates compulsory registration (regardless of turnover) for persons supplying goods or services through an ECO where the ECO is required to collect TCS under Section 52. Restaurant service supplied through an ECO, however, is taxed differently — it falls under Section 9(5), where the ECO itself pays the GST as deemed supplier. As clarified in Circular 167/23/2021-GST, suppliers whose restaurant-service supplies are entirely routed through Section 9(5) ECOs can still avail the normal ₹20 lakh (₹10 lakh for special category states) turnover exemption — compulsory registration under Section 24(ix) applies to the TCS category, not automatically to Section 9(5) restaurant services. In practice, most cloud kitchens cross ₹20L quickly and register anyway, but a very small home-baker operation supplying only via Swiggy/Zomato with turnover genuinely below the threshold is not legally compelled to register purely because of that platform sale.

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Practical Note: Aggregator platforms (Swiggy, Zomato) generally require a GSTIN to onboard a seller as standard commercial policy, so most cloud kitchens and home bakers end up registering regardless of the statutory threshold. But this is a platform-level commercial requirement, not a blanket GST law mandate for every seller no matter how small the turnover.

FAQ

For the connected rule, example or next step, see Restaurant and Food Delivery GST: Platform, Invoice and Rate Controls.

Does a home baker selling on Swiggy need GST registration? +

Not automatically by law if turnover stays below ₹20 lakh. Restaurant service sold through an ECO falls under Section 9(5) — the ECO pays the GST as deemed supplier — and Circular 167/23/2021-GST confirms the normal turnover-based exemption still applies to such suppliers. Section 24(ix)'s compulsory registration (regardless of turnover) applies to sellers in the Section 52 TCS category, not to Section 9(5) restaurant service. That said, Swiggy and Zomato typically require a GSTIN as a condition of onboarding sellers on their platforms as a matter of commercial policy, so in practice most home bakers register anyway even when legally exempt.

Can a cloud kitchen claim ITC on kitchen equipment? +

No, for standard food service supplies at 5%. ITC is blocked under Section 17(5) of the CGST Act for food and beverages and restaurant services. Cloud kitchens are treated as restaurant services. However, if the cloud kitchen also manufactures packaged foods (different HSN, sold in retail), those manufacturing activities may allow ITC on equipment used exclusively for manufacturing.

What GST does Zomato charge on its delivery commission? +

Zomato/Swiggy charge 18% GST on their commission (platform fee + delivery commission). A registered cloud kitchen sees this as an input service on which ITC would normally be available — but since restaurant services attract 5% with no ITC, this 18% commission GST paid to aggregators is a straight cost and cannot be offset.

Source and review trail

Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.

Primary category: GST & Indirect Tax
Official starting point: www.gstcouncil.gov.in

Page source links

Primary sources & related provisions

Statutory provisions referenced in this guide: