Swiggy Penalised Rs20,000 For Levying Rs4.50 GST on Soft Drink
Moneylife Digital Team 09 July 2021
The District Consumer Disputes Redressal Commission at Panchkula, has imposed a penalty of Rs20,000 on food delivery platform Swiggy for levying Rs4.50 goods and service tax (GST) on the maximum retail price (MRP) of three soft drink bottles from a customer.
 
Abhishek Garg, a resident of Sector 2, Panchkula, had submitted to the consumer commission that in August 2018, he had ordered food a cheesy garlic stick worth Rs144 and three Coca Cola bottles of 500ml at Rs30 each for Rs90 from La Pino’z Pizza, through Swiggy. He paid the bill amount of Rs197 in cash.
 
He realised that he was charged Rs4.50 as GST for the soft drinks though he was already paying the maximum retail price (MRP), which he contended was illegal under the Consumer Goods (Mandatory Printing of Cost of Production and Maximum Retail Price) Act, 2006.
 
The complainant brought the matter to the notice of Swiggy through Twitter. Following which, the company acknowledged the fact that the GST was charged on MRP items and admitted its lapse and deficiency.
 
Then on 31 May 2019, Mr Garg approached the district consumer forum with his grievance.
 
In its response, Swiggy submitted that it was only an intermediary and collecting the payment on behalf of the merchant, who charged all applicable taxes on the bill. So, there was no deficiency in service on its part.
 
“All applicable taxes and levies, the rates thereof and the manner of applicability of such taxes on the bill are being charged and determined by merchants. So, there is no deficiency in service and unfair trade of practice on its part,” Swiggy contended through its counsel, while praying for dismissal of the complaint.
 
 The forum pointed out, “It is not...that Swiggy is providing purely gratuitous service to its customers, without any consideration.”
 
The commission concluded that Swiggy cannot defend itself by saying that it has no role to play in the entire transaction of the sale and purchase of food between the complainant and the restaurant.
 
“Swiggy is an online shopping portal and works as a link between the buyer and seller to collect orders from consumers and forward those to the seller/vendor concerned for the purpose of delivery...It is certainly not a charitable organisation,” the district consumer commission held.
 
It held Swiggy guilty of unfair and deficient services, the commission directed it to refund Rs4.50 along with interest at 9% per annum with effect from the date of filing of the complaint till its realisation.
 
Out of the total penalty of Rs20,000, Rs10,000 will be deposited with the Haryana State Council for Child Welfare, while Mr Garg will be paid Rs10,000 for  mental agony, harassment and litigation charges. 
 
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