Karnataka mulls 1-2% transaction fee on Zomato, Swiggy, others
What's the story
The Karnataka government is mulling a 1-2% transaction fee on aggregator platforms like Zomato, Swiggy, Flipkart, Amazon, Ola, Uber, Dunzo, Zepto, Urban Company (UC), and more.
The proposed levy is part of a larger effort to support gig workers who deliver for these companies.
The money collected through this fee will go to a welfare board that will implement social security measures for these workers.
Fee details
Transaction fee to fund gig worker welfare
The proposed transaction fee won't help the platforms financially but may scare customers away with a 1-2% increase in order costs.
A senior state government official told Moneycontrol, "We are planning to collect a welfare fee that will be levied on a per-transaction basis, ranging from 1-2% order on each platform."
The official went on to clarify that this fee would be applicable across all aggregator platforms and services.
Legislative process
Bill to be discussed in state cabinet
The Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill will be discussed in the state cabinet on October 24.
If approved, it will likely be tabled during the winter assembly session in December.
The labor department is considering whether to impose this cess on transportation costs instead of total product cost, since GST is already charged on overall cost.
Feedback impact
Fee decision influenced by aggregator feedback
The draft bill had originally proposed a fee of 1% to 5% per order, but was later revised to 1-2%.
The final decision on the fee percentage will be taken once the bill is passed by the assembly.
This change was influenced by feedback from aggregators who preferred a per-transaction fee over one based on annual turnover.
Legislative precedent
Precedent set by Karnataka Cine and Cultural Activists Bill
The proposed transaction fee mirrors a similar move in the Karnataka Cine and Cultural Activists (Welfare) Bill, 2024.
The bill, which was assented to by Karnataka Governor Thaawarchand Gehlot last month, proposes a cess of up to 2% on movie tickets and OTT subscription fees for the welfare of cinema and cultural artists.
The government has held extensive consultations with stakeholders to finalize the gig workers' welfare bill.