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The 56th GST Council recommended an 18% GST treatment under section 9(5) for certain local-delivery services supplied through an e-commerce operator when the delivery supplier is not liable for GST registration. It also recommended excluding local-delivery services provided by and through an e-commerce operator from the scope of Goods Transport Agency (GTA) services. Those are Council recommendations; the materials available do not establish a later binding clarification resolving how local delivery differs from GTA or courier services.
What the GST Council recommended
In its release on the 56th GST Council meeting, the Council said local-delivery services supplied through an electronic commerce operator (ECO) were not then notified under section 9(5) of the Central Goods and Services Tax Act. It recommended notifying the service under that section when the person supplying it through the ECO is not liable for GST registration. The release states an 18% rate and recommends excluding local-delivery services provided by and through an ECO from the scope of GTA services. Read the Council’s release.
Section 9(5) is relevant because it provides for the ECO to pay GST on specified notified services supplied through it. The recommendation is conditional: the supplier’s registration liability and the role of the ECO matter. It should not be read as saying that every delivery arranged online automatically falls under section 9(5), or that every transport service becomes local delivery.
Why local delivery, GTA and courier services are still being questioned
A report dated 25 November 2025 said FIRST India approached the Ministry of Finance for guidance after the Council’s recommendations. The report describes questions rather than settled legal answers. FIRST India’s Director General, Sushma Morthania, said: “The GST Council’s move to streamline compliance and plug loopholes is well-intentioned, but the lack of operational clarity on what qualifies as a ‘local delivery service’ has led to widespread confusion.” Asian Prime News report.
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The reported issues include where “local” delivery ends geographically or operationally; how it differs from GTA and courier services; whether an existing GTA exemption applies to direct-to-consumer deliveries; how intra-state GTA services facilitated by platforms should be treated; and whether cash-on-delivery handling or product verification forms part of a GTA service or is separately taxable. The report does not establish how those questions were answered.
How the service categories compare
The Council recommendation and the reported questions point to several facts a business needs to establish before choosing a GST treatment. The table distinguishes what the Council release says from issues that remain open in the reported request.
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| Question | What is established | What remains to be checked |
|---|---|---|
| Who provides or arranges the service? | The recommendation concerns local delivery supplied through an ECO and, in its GTA exclusion, services provided by and through an ECO. | The contract and actual operating arrangement determine whether a platform is facilitating the service and who supplies it. |
| Is the supplier liable for GST registration? | The recommended section 9(5) treatment applies when the person supplying the service through the ECO is not liable for registration. | Registration liability must be assessed for the supplier’s circumstances; the recommendation does not cover every supplier in the same way. |
| Is the service local delivery, GTA or courier? | The Council recommended excluding local-delivery services provided by and through an ECO from GTA services. | The report says FIRST India sought operational and geographic boundaries between these categories. No binding answer to that request is established here. |
| Is the movement intra-state? | The industry report identifies intra-state, platform-facilitated GTA services as an area of uncertainty. | The report does not supply a resolved tax treatment for those services. |
| Are ancillary activities included? | The report raises cash-on-delivery handling and product verification as examples of disputed treatment. | Whether such activities form part of the transport service or are separately taxable depends on the applicable rules and transaction documents; the report does not settle the point. |
Does e-commerce delivery count as GTA service?
Not necessarily. The Council’s recommendation expressly places local-delivery services provided by and through an ECO outside the scope of GTA services, but it does not establish that all deliveries arranged by e-commerce platforms qualify as local delivery. The reported request itself asks how to distinguish local delivery from GTA and courier services, including where the service is intra-state or includes additional handling.
For a particular business model, review the service contract, invoices, supplier registration status, delivery route and any separately charged activities alongside the relevant legal instrument. A platform’s involvement alone is not enough, on the available material, to determine the category.
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Who pays GST on local delivery arranged through a platform?
Under the Council’s recommendation, the ECO would pay GST under section 9(5) for the specified local-delivery service when the person supplying it through the ECO is not liable for GST registration. The Council release’s stated rate is 18%. That is the recommendation’s described treatment, not proof that it was implemented in a particular case or that it applies to every platform-arranged delivery.
The Council’s FAQ says rate changes for goods and services other than specified tobacco products were to take effect on 22 September 2025. That general effective date does not by itself confirm the implementation date of every Council recommendation or answer the classification questions about local delivery, GTA and courier services. See the Council FAQ.
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What businesses should verify before invoicing
- Identify the actual supplier of the delivery service and the ECO’s role under the contract.
- Establish whether the supplier is liable for GST registration, rather than relying only on whether it has registered.
- Document the service’s geography, route, nature and any connection to a GTA or courier arrangement.
- Check whether cash-on-delivery handling, product verification or other activities are bundled with transport or charged separately.
- Confirm the current applicable notification, circular and case law before assigning a tax treatment; the Council recommendation alone does not resolve the reported questions.
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