New GST on Cloud Kitchen Services and Food Delivery Operations
With the rise of platforms like Swiggy, Zomato, and Uber Eats, cloud kitchens—also known as virtual or ghost kitchens—have transformed the food industry. But how does GST (Goods and Services Tax) apply to this digital-first model? Whether you’re a cloud kitchen operator or an aggregator platform, understanding the gst on cloud kitchen operations is crucial for compliance and pricing.
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New GST Rate for Cloud Kitchen Services in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for cloud kitchens and related services (no compensation cess).
New GST Rate for Cloud Kitchen & Aggregator Services
| Service Type | New GST Rate | HSN/SAC Code |
|---|---|---|
| Food supplied by cloud kitchen (delivery/takeaway) | 5% (No ITC) | 9963 |
| Packaged/branded food items | 5% or 18% (by product) | Varies |
| Aggregator/platform commission (Swiggy, Zomato) | 18% | 9983 |
Note: Restaurants supplied via e-commerce operators remain taxed at 5% (no ITC); the operator is liable to pay GST as deemed supplier. Platform commissions continue at 18%. With 12% discontinued, products formerly at 12% generally move to 5% under the rationalised slab.
What Is a Cloud Kitchen?
A cloud kitchen is a commercial kitchen that prepares food exclusively for delivery without offering dine-in services. Orders typically come via:
- Food aggregator apps (Zomato, Swiggy)
- Direct orders through the restaurant’s website or app
- Third-party logistics or delivery partners
Though the operations are virtual, GST registration and compliance are mandatory once the turnover threshold is exceeded.
Old GST Rate for Cloud Kitchen Services
(Old GST Rates – Applicable Until 21st September)
| Service Type | GST Rate | HSN/SAC Code |
|---|---|---|
| Food supplied by cloud kitchen (delivery/takeaway) | 5% | 9963 |
| Packaged/branded food items | 12% or 18% | Varies |
| Aggregator/platform commission (Swiggy, Zomato) | 18% | 9983 |
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GST for Cloud Kitchen on Direct Orders
If a cloud kitchen takes orders directly (via website, WhatsApp, or phone):
- Must be registered under GST if turnover exceeds ₹20 lakh
- Must charge 5% GST on food invoices
- Cannot claim Input Tax Credit under 5% scheme
Input Tax Credit (ITC) for Cloud Kitchens
| GST Rate Type | Input Tax Credit Eligibility |
|---|---|
| Charging 5% GST | Not allowed |
| Charging 18% GST (on packaged/bundled items) | Input Tax Credit (ITC) allowed |
Most cloud kitchens opt for the 5% GST structure due to ease of compliance, but it disallows ITC on expenses like:
- Raw materials and ingredients
- Packaging supplies
- Kitchen rentals and equipment
- Marketing or advertising services
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Understanding the gst on cloud kitchen services helps food business owners, aggregators, and consumers make informed decisions. Whether you run a single-kitchen setup or multiple online brands, staying GST-compliant is key to scaling your food delivery operations smoothly.
