GST impact: Rebound follows two-week dip

Post the roll out of the Goods and Services Tax (GST), online food aggregators and delivery firms reportedly witnessed a 10-13% dip in their orders for the first two weeks, before recovering. The reasons cited for the dip were — restaurants being in a transition mode, and a few customers being in a wait-and-watch mode.

A few restaurants in Chennai pulled off their businesses from online and delivery firms.

K. Bushan,V-P, operations, Dinein.in, said, “There were apprehensions about GST and the order numbers dwindled. But now, it business as usual for us.” A spokesperson from Zomato, said, “GST has not affected the number of food delivery orders placed on Zomato. However, we are working closely with our restaurant partners to ensure a smooth transition into the new system.” According to Srivats TS, V-P, marketing, Swiggy, there has been a strong growth in orders. “To ensure that billings are not affected, we have been working closely with our partners for a smooth transition,” he added.

The co-founder of an online food aggregator, who wished anonymity, said a few of his clients had pulled off their business as they did not understand GST and were reluctant to shed extra money to third parties.

Tax at source

Rohan Agrawal, senior consultant at RedSeer Consulting, said, “Smaller restaurants might be apprehensive of their partnership with online delivery players initially (owing to the tax collection at source — 2% and its impact on working capital). But looking at the growth the restaurants have been witnessing from online delivery players, they are not expected to remain away for long,” he added. A hotelier on Mount Road who got out of online services, said, “I found the commission we had to pay online aggregators to be an additional expense and was impacting my margins,” he said.
source: http://www.thehindu.com/news/cities/chennai/gst-impact-rebound-follows-two-week-dip/article19366961.ece