Section 9(5) GST on Aggregators: Rules for Zomato, Swiggy & Uber

In a typical GST transaction, the person providing the service is the one liable to pay the tax. However, the gig economy (E-commerce Aggregators) presented a unique challenge: How do you collect tax from millions of individual rickshaw drivers or small "cloud kitchens" that are often unregistered?

To solve this, the government introduced Section 9(5) of the CGST Act.

Under this section, the tax liability for specific services is "shifted" from the service provider (the driver/restaurant) to the E-commerce Operator (ECO). Effectively, the aggregator is treated as if they were the service provider for the purpose of tax payment.

This guide decodes the four specific services under Section 9(5) and the compliance impact on small vendors and platforms in 2026.

The Four Services under Section 9(5)

GST liability shifts to the aggregator only for these specific services:

1. Passenger Transport (Uber, Ola, Rapido)

If you book a cab or an auto via an app, the aggregator (Uber/Ola) must pay the 5% GST on the entire ride amount.

• The Catch: This applies even if the driver is a small individual without a GST registration.

2. Accommodation (OYO, Airbnb)

If you book a hotel or a guest house through a platform.

• The Rule: The platform pays the GST only if the hotel itself is unregistered.
• The Exception: If the hotel is registered under GST, the hotel pays the tax, and the platform only handles the TCS deducted at source.

3. Housekeeping Services (Urban Company)

Plumbing, cleaning, or salon services provided via an app.

• Similar to hotels, the platform pays the GST only if the service provider is unregistered.

4. Restaurant Services (Zomato, Swiggy)

Added in 2022, this is the most common Section 9(5) scenario.

• The Rule: Zomato or Swiggy must collect and pay 5% GST on the "Restaurant Service" value, regardless of whether the restaurant is registered or not.

Key compliance Rule: The "No ITC" Restriction

For Section 9(5) restaurant services, the 5% tax is a "Special Rate."

• Aggregators: Zomato/Swiggy pay the 5% GST, but they cannot claim any Input Tax Credit (ITC) to pay this liability. They must pay the entire 5% in cash.
• Restaurants: Since the aggregator is paying the 5% GST, the restaurant does not have to pay tax on these sales in their own GSTR-3B return.

Legal Reference

Relevant Law: Section 9(5) of the CGST Act, 2017. Notification No. 17/2017-Central Tax (Rate) as amended by Notification No. 17/2021 regarding restaurant services.

Difference between Section 52 (TCS) and Section 9(5)

Many businesses confuse these two.

• Section 52 (TCS): The platform is only a "collection agent" who deducts 1%. The Vendor pays the actual GST. (Example: Amazon sellers).
• Section 9(5): The platform is the "deemed supplier." The Platform pays the full GST. The vendor doesn't pay anything. (Example: Swiggy restaurants).

Reporting in GST Returns

• Platforms: They must report Section 9(5) supplies in a specific table (Table 14) of their GSTR-1 and in their GSTR-3B.
• Vendors: Small restaurants must report these as "Supplies under 9(5)" in their GSTR-1 to ensure their total turnover is recorded, even if they aren't paying the tax.

Common Mistakes with Section 9(5)

1. Double Taxation by Restaurants: Small restaurants often continue to charge 5% GST on their own bills and pay it in their GSTR-3B for Zomato orders. This is a waste of money. The aggregator is already paying that tax.
2. Missing GST on Platform Fees: Section 9(5) only covers the "Main Service." The "Platform Fee" or "Delivery Fee" charged by Zomato/Uber to the customer is a separate service, usually taxed at 18%.
3. ITC Reversal for Restaurants: Even though Zomato pays the tax, the restaurant remains a "service provider." If the restaurant also makes direct sales, they must carefully allocate their ITC between direct taxable sales and aggregator sales if their tax rates differ (e.g., selling branded sweets at 12% vs. food at 5%).

Conclusion

Section 9(5) is a masterpiece of administrative simplicity, shifting the burden from millions of small gig workers to a few large tech companies. For platforms in 2026, the challenge lies in managing the cash flow impact of the "No-ITC" 5% tax. For street vendors and home chefs, this section is a "compliance shield"—allowing them to access a national customer base without the headaches of monthly tax filing and audits. If you are a service provider on these platforms, ensure your "Merchant Statement" clearly bifurcates Section 9(5) sales to keep your turnover reconciliation clean.