Why Most Cloud Kitchens in India Are Unknowingly Losing Money on Swiggy & Zomato
If you're running a cloud kitchen or a restaurant listed on Swiggy or Zomato, there's a good chance you're earning far less than you think. The reason? Most restaurant owners only look at the headline commission rate (say, 25%) but miss several hidden layers of deduction that can eat another 5–10% of your revenue.
The Hidden Cost Nobody Tells You: GST on Commission
Swiggy and Zomato are required by Indian tax law to charge 18% GST on their commission amount — not on your menu price, but on the commission itself. Here's what that looks like in practice:
- Menu Price: ₹250
- Commission @ 25%: ₹62.50
- GST on that commission @ 18%: ₹11.25
- Total platform deduction: ₹73.75 — that's nearly 30% of your revenue, not 25%.
How to Calculate Your Real Profit Per Order
The formula our MenuHelper tool uses is simple but complete:
- Step 1: Start with your Menu Price (what the customer pays).
- Step 2: Subtract your Food Cost (COGS — ingredients, labour).
- Step 3: Subtract Packaging Cost.
- Step 4: Subtract Platform Commission (commission% × menu price).
- Step 5: Subtract GST on Commission (18% of the commission amount).
- Step 6: Subtract Fixed Platform Fee (₹5–₹10 per order typically).
- What remains is your Net Profit Per Order.
What Is a Good Profit Margin for a Delivery-Only Restaurant?
Industry experts recommend maintaining at least a 15–25% net profit margin per order to sustain and grow a cloud kitchen business. If your margin is below 10%, you need to act immediately — either by raising menu prices, reducing food costs, or renegotiating your commission tier with the platform.
Swiggy vs Zomato Commission in 2026: Which is Cheaper?
Both platforms offer tiered commission structures. Swiggy's Gold subscription can lower rates to around 18–20%, while standard listing rates hover at 23–28%. Zomato Pro partners have reported similar ranges. The fixed per-order fee also varies. Always verify your exact rate from your restaurant partner dashboard — do not rely on rumour.