GST 2.0 Shockwave: Why Domino’s and Direct Orders May Beat Zomato and Swiggy Soon

New Delhi | September 9, 2025 – A big change is coming to how Indians order food online. Starting September 22, 2025, the government will roll out GST 2.0, a new version of the Goods and Services Tax system. This move will make food delivery through platforms like Zomato and Swiggy more expensive, while giving a cost advantage to restaurants such as Domino’s that deliver food directly.

This reform is not just about a small tax tweak. It could reshape the food delivery business, affect consumer spending, and even change how restaurants reach their customers.

The Big Change in GST

Under GST 2.0, the delivery service fee charged by e-commerce operators will now attract 18% GST. This is in addition to the 5% GST already charged on the restaurant food itself.

Earlier, there was confusion on whether delivery services provided by Zomato or Swiggy should be taxed separately. Many platforms absorbed the cost internally or bundled it with platform charges. But now the GST Council has made it clear: delivery is a separate taxable service.

For a customer, this means that even if the food price remains the same, the delivery fee will rise. Suppose a delivery charge is ₹30. Under the new rule, 18% GST will add ₹5.4, raising the fee to around ₹35. That may look small, but on a large scale, the cost difference could change customer choices.

Why Domino’s and Others Gain an Edge

Chains like Domino’s, Pizza Hut, and KFC, which run their own in-house delivery systems, will not face this extra GST. They only charge the existing 5% GST on food. This means a Domino’s pizza ordered directly from its app or website will be cheaper compared to the same order placed through Zomato or Swiggy.

Industry experts say this will give Quick Service Restaurants (QSRs) a major advantage. An official from the GST Council explained:

“For Domino’s and other restaurants with their own fleets, the tax position has not changed. But for aggregators like Zomato and Swiggy, GST is now clearly applicable on delivery.”

This clarity removes any loophole and sets the stage for a shift in consumer behavior.

Impact on Consumers

For ordinary customers, the effect will be straightforward: ordering food from Zomato or Swiggy will cost more.

• A delivery fee of ₹30–40 will increase slightly with GST.
• Service charges or platform fees, which were already controversial, may rise further as platforms pass on the extra tax burden.
• For frequent users, even small changes will add up over weeks and months.

This could make customers think twice before ordering a single small meal. They may prefer larger group orders or look for direct restaurant apps that don’t charge extra.

How Much Will Platforms Lose?

According to early estimates, Zomato and Swiggy together could face a ₹200 crore annual hit because of this rule. The reason is twofold:

1. Platforms might not be able to pass the full tax burden to consumers. Higher delivery charges can reduce order volumes.
2. They may have to reduce payouts to delivery partners, creating dissatisfaction among gig workers.

Zomato and Swiggy are already struggling with rising fuel prices, delivery partner protests, and heavy competition. This extra GST will only add pressure on their business models.

GST 2.0 Beyond Food Delivery

The new GST system is not only about food. GST 2.0 introduces a two-slab structure for many goods and services. The idea is to make taxation simpler, improve compliance, and reduce confusion.

Some highlights include:

• Two Slabs Instead of Multiple: Items will be categorized more cleanly, avoiding the current maze of 5%, 12%, and 18% slabs.
• Relief for Essentials: Some food staples, groceries, and medicines will see lower or zero GST. This could ease pressure on households.
• Compliance Focus: With digital tracking and fewer slabs, the government hopes to plug leakages and improve tax collection.

So while GST 2.0 may pinch food delivery customers, it could bring relief in other areas like groceries and household bills.

Restaurants Smell Opportunity

For restaurants, especially big chains, this is a chance to win customers back from aggregator apps. Many restaurants had earlier complained that Zomato and Swiggy charge high commissions, sometimes 20–30% per order.

In 2019, the National Restaurants Association of India (NRAI) launched the #Logout campaign, asking restaurants to leave food delivery apps and promote direct ordering. At that time, the movement lost steam because customers were used to the convenience of aggregators.

Now, GST 2.0 may revive that sentiment. If direct orders save money, customers may happily skip Zomato and Swiggy and go straight to Domino’s, Pizza Hut, or even local restaurants with their own delivery boys.

Challenges Ahead for Zomato and Swiggy

To survive this new tax environment, platforms will need to adapt quickly. Possible strategies include:

• Bundling Benefits: Offering loyalty programs, free delivery passes, or discounts to retain customers.
• Expanding Into Other Services: Zomato has already experimented with grocery delivery in the past. Diversification may help offset losses.
• Negotiating With Restaurants: Platforms could try to convince restaurants to share part of the GST burden. But this may cause friction.

The bigger worry is customer psychology. If people start seeing platforms as “expensive middlemen,” they might change their habits permanently.

Customers Already Comparing Prices

On social media, users are already talking about price differences. A Domino’s pizza ordered directly may cost ₹350, while the same pizza on Zomato could cross ₹380 or more after taxes, delivery fees, and platform charges.

Such comparisons may spread quickly once GST 2.0 goes live. People love convenience, but they also love saving money. And in a country where millions order budget meals daily, even a ₹20 difference can drive large-scale behavioral change.

What This Means for the Future

GST 2.0 has brought clarity to taxation, but clarity has consequences. By taxing delivery fees separately, the government has tilted the balance in favor of direct restaurant orders.

• Winners: Domino’s, Pizza Hut, KFC, and local restaurants with their own fleets. They can advertise themselves as the cheaper choice.
• Losers: Zomato and Swiggy, which will now be seen as pricier platforms. Delivery partners may also feel the pinch if platforms cut their share.
• Neutral Players: Customers benefit in groceries and essentials but pay more for food delivery.

In the long run, platforms may need to innovate and show added value beyond delivery—like better deals, exclusive menus, or faster services.

Final Word

GST 2.0 is not just a tax update—it’s a game-changer for India’s food delivery business. From September 22, the bill for ordering your favorite meal may look different. A Domino’s pizza could suddenly feel cheaper if ordered directly. Meanwhile, Zomato and Swiggy will be under pressure to prove that their convenience is still worth the extra cost.

The battle between direct restaurant orders and food delivery apps is about to heat up. And as always, the customer’s wallet will decide who wins.