Zomato & Swiggy Shares Jump: Shares of food delivery giants Zomato and Swiggy surged by up to 10% in trading this week, driven by a major regulatory update from India’s Income Tax Department. The government clarified that delivery fees charged by these platforms will not be classified as a taxable service, easing concerns over potential GST liabilities. This announcement has injected fresh optimism into the sector, boosting investor confidence.
Tax Clarity Sparks Investor Cheer
The Income Tax Department’s clarification ended months of uncertainty around whether delivery charges collected by Zomato and Swiggy would attract additional GST. Previously, investors feared these costs might be taxed as a separate “service,” denting profit margins. The recent update confirms that delivery fees are part of the overall food order transaction, not a standalone service. This relief is seen as a win for companies and customers alike, preventing higher costs for end-users.
Stock Performance Highlights
- Zomato’s shares climbed nearly 10% on the BSE, hitting a 52-week high.
- Swiggy, which is preparing for its IPO, also saw a sharp rise in its valuation during recent private market trades.
- Brokerage firms revised their outlooks, citing improved profitability prospects due to reduced tax risks.
Why This Matters for the Food Delivery Sector
The tax relief comes at a critical time. Zomato and Swiggy have been focusing on cutting losses and achieving sustainable growth. With this hurdle removed, both companies can allocate resources toward expanding their user bases, improving delivery networks, and experimenting with new revenue streams like quick commerce.
Analysts Optimistic About Long-Term Growth
Market experts highlight that the clarification removes a major overhang on the sector. “This decision not only safeguards margins but also reinforces the government’s support for digital businesses,” said a Mumbai-based equity analyst. Investors are now betting on stronger quarterly earnings and smoother paths to profitability.
Looking Ahead
The rally reflects growing confidence in India’s tech-driven consumer platforms. As Zomato and Swiggy expand beyond food delivery into grocery and instant commerce, regulatory clarity will remain key to their success. For now, the tax relief has given both companies—and their shareholders—a reason to celebrate.
Bottom Line
The Income Tax Department’s move to exempt delivery charges from additional GST has lifted the stocks of Zomato and Swiggy, signaling brighter days ahead for India’s food delivery sector. With clearer regulations and focused growth strategies, these platforms are poised to capitalize on the country’s booming digital economy.