There is no universal GST rate for a line called “delivery”, “shipping”, “freight” or “logistics”. The correct treatment depends on the service actually supplied, the contractual supplier, whether an electronic commerce operator (ECO) is involved, the provider’s registration status and the specific rate entry and conditions that apply.
For local delivery supplied through an ECO, the Government of India’s FAQ on the 56th GST Council decisions states an 18% rate. If the local-delivery provider is not liable to register under section 22(1) of the CGST Act, section 9(5) makes the ECO liable for that GST. If the provider is registered, the provider pays the 18% GST. GTA, courier, multimodal and other transport services follow different entries and conditions, so the local-delivery rule cannot be applied to every freight invoice.
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What decides GST on an e-commerce delivery charge?
Start with the legal supply, not the wording on a checkout screen. A marketplace may display a single “delivery fee”, while the seller, a local-delivery provider, a goods transport agency (GTA), a courier or the platform itself may be the contractual supplier. The party that collects money is not automatically the party that supplied the transport service or owes GST on it.
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- Who is the supplier? Read the seller’s terms, the delivery provider’s invoice, the platform agreement and the tax invoice. Identify who undertook to transport the goods.
- What service was supplied? Classify it as local delivery, GTA transport, courier service, multimodal transport or another goods-transport service.
- What is the ECO’s role? An ECO may arrange a service, collect consideration, act as the supplier for a notified service under section 9(5), or merely facilitate a transaction.
- Is the provider registered? Registration status matters for the specific local-delivery rule described in the 56th Council FAQ.
- Is consideration collected through the ECO? Section 52 TCS may apply, but TCS is separate from GST on the underlying delivery service.
- Is the delivery charge a separate supply or part of another supply’s value? A separate line on an invoice does not by itself answer the valuation question.
Keep the classification and the liability analysis together. A correct rate applied to the wrong service category still produces the wrong tax result.
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Current rates and categories at a glance
| Service category | Rate or treatment established in the official material | Who generally pays under the stated condition |
|---|---|---|
| Local delivery through an ECO | 18% | An ECO under section 9(5) when the supplier is not liable to register under section 22(1); otherwise the registered local-delivery provider |
| Multimodal transport with at least one air leg | 18%, with full input-tax credit on inputs or input services in the FAQ’s explanation | The applicable supplier under the schedule and contract |
| Multimodal transport without an air leg | 5% in the 56th Council FAQ’s described example; the example is fact-specific | The applicable supplier under the schedule and contract |
| Residual goods-transport services outside specified categories | 18% under the general residual entry shown in the CBIC schedule | The supplier or other liable person under the applicable entry |
| GTA services | Conditional entries with different rate and input-tax-credit options | Depends on the selected entry, conditions and the person liable under the applicable rule |
The figures above are not a blanket “logistics rate”. The CBIC schedule separates rail and vessel transport, GTA services, multimodal transport and residual goods transport. Confirm the exact entry, effective date and conditions before filing a return or correcting an invoice.
Local delivery through an ECO: the specific 18% rule
The Press Information Bureau FAQ on the 56th GST Council decisions states: “The services of local delivery are taxable at 18%.” It also addresses who pays when the service is supplied through an ECO.
When the delivery provider is not liable to register
If a person supplying local-delivery services through an ECO is not liable to register under section 22(1) of the CGST Act, the FAQ says the service is covered by section 9(5). In that situation, the ECO is treated as the supplier for the notified service and pays the GST. The delivery provider does not become liable merely because the platform displays the fee or collects the customer’s payment.
When the delivery provider is registered
Where the local-delivery provider is registered, the same FAQ assigns payment of the 18% GST to that provider. The provider should issue the appropriate tax invoice and account for the tax in its own compliance records, subject to the operative notification and the contract structure.
Why this is not a GTA rule
The FAQ expressly says local-delivery services provided by and through ECOs are excluded from the scope of GTA services. Do not reclassify an app-arranged local delivery as GTA merely because goods are moved by road. The legal service supplied and the notified category determine the treatment.
Check the operative notification
The FAQ explains the Council’s decision; it is not, by itself, a substitute for checking the implementing Gazette notification, its effective date and later amendments. Before issuing a compliance instruction, verify the notification in force on the date of the transaction. The 18% statement above should therefore be read as the official FAQ’s treatment of the described local-delivery service, not as permission to ignore subsequent legal changes.
GTA, courier and other goods-transport services
“Logistics” is a commercial description, not a single GST category. A GTA, courier, an operator providing another road-transport service and a multimodal transporter can have different rate entries, invoice requirements and input-tax-credit consequences.
Goods transport agency services
The CBIC rate schedule has separate GTA entries with conditions and alternative input-tax-credit treatment. A GTA invoice and contract should be read together: the applicable option, the person liable to pay tax and the permitted credit position can all depend on the entry selected and the facts. Do not import the 18% local-delivery rate into a GTA invoice without checking the schedule.
Courier and residual goods transport
A courier charge is not automatically local delivery through an ECO. Determine the contractual service, route and supplier. For goods-transport services outside the specifically listed categories, the schedule shows a general residual entry of 18%. That residual entry does not override a more specific GTA, multimodal, rail or vessel provision.
Multimodal transport
The schedule defines multimodal transportation as movement by at least two modes under a contract in which the multimodal transporter acts as principal and assumes responsibility for the movement. The 56th Council FAQ gives two useful examples:
- In its no-air example, the FAQ states a 5% rate and says the transporter may take input tax credit on its listed GTA and container-transport inputs at 5%.
- Where at least one leg is by air, the FAQ states an 18% rate and full input tax credit on inputs or input services.
These are the FAQ’s examples tied to their described facts. A bill labelled “multimodal logistics” still requires review of the contract, the modes used and the applicable schedule entry.
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Not necessarily. A seller may show freight as a separate line, include it in the product price or arrange transport through a platform. The line-item format alone does not establish whether delivery is a separate supply or part of the value of another supply.
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- Small convenient pocketbook size aids in emergency preparedness, planning, and training with ERGs numerically indexed and color-coded to help emergency responders find vital information fast.
- 2024 Updates: The Pipeline and Hazardous Materials Safety Administration (PHMSA) released a comprehensive summary of updates. Most significantly a QR code on the back cover that provides access to critical incident reporting information.
- Other changes for 2024 have been made to continue to provide the most accurate emergency response information to help all front-line persons and all first responders stay safe during transportation emergencies.
- Specifications: 4" x 5 1/2" Pocketbook Size, English, Softbound. Copyright 2024.
Valuation depends on the relevant law and transaction facts, including who contracted to provide transport, who bears responsibility and how the consideration is structured. The available official material does not resolve every marketplace billing pattern or every bundled-charge scenario. For a particular invoice, obtain the full order terms, tax invoice, delivery contract and applicable valuation provision before deciding whether the charge forms part of another supply’s taxable value.
Section 9(5) is not the same as section 52 TCS
These provisions are often confused because both can involve an ECO.
Section 9(5): liability for notified services
Section 9(5) shifts payment responsibility for specified services supplied through an ECO. In the local-delivery case described by the 56th Council FAQ, the ECO pays GST when the underlying provider is not liable to register under section 22(1). The mechanism is limited to notified services and does not make an ECO the supplier for every charge shown on a marketplace.
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Section 52: tax collected at source
CBIC describes TCS as a separate ECO collection and remittance obligation for relevant transactions where the ECO collects consideration for taxable supplies made through it. A TCS amount is not the GST rate on the delivery service. An ECO can have a section 52 obligation without becoming liable for GST on every underlying transport supply.
Transactions involving two ECOs
Circular 194/06/2023-GST, dated 17 July 2023, generally assigns section 52 compliance to the supplier-side ECO that finally releases payment to the supplier when that ECO is not itself the supplier. If the supplier-side ECO is itself the supplier, the circular says the buyer-side ECO collects TCS when it pays that supplier. Map the payment flow before deciding which ECO must collect and remit TCS.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should appear on the invoice?
For a taxable service, CBIC’s invoice rules generally require the invoice within 30 days after the service is supplied, subject to exceptions for specified supplier classes. Check the invoice date against the service date and confirm that the supplier identity, GSTIN, description, place-of-supply details, rate and tax amount are consistent with the actual contract.
Additional GTA particulars
A GTA supplying taxable road transport must include additional particulars, including:
- gross consignment weight;
- consignor and consignee names;
- registration number of the goods carriage;
- description of the goods;
- origin and destination; and
- the GSTIN of the person liable to pay tax, along with other prescribed particulars.
If a platform issues a generic “shipping” receipt without identifying the actual supplier or liable person, ask for the underlying tax invoice. A payment receipt can show what was collected without proving that the GST classification is correct.
How to analyse an order or logistics invoice: a practical procedure
- Collect the documents. Save the order confirmation, seller invoice, delivery-provider invoice, platform terms, payment record and any transport contract.
- Trace the contractual promise. Identify who promised to deliver the goods, who hired the transporter and who bears responsibility for loss or delay.
- Name the service precisely. Write “local delivery”, “GTA”, “courier”, “multimodal” or another specific category rather than relying on “logistics”.
- Check ECO involvement. Decide whether the ECO is the supplier, an agent or a payment intermediary, and whether the service is one notified for section 9(5).
- Check registration status. For local delivery through an ECO, determine whether the provider is liable to register under section 22(1).
- Apply the schedule entry. Review rate, conditions, reverse-charge or other liability rules and input-tax-credit restrictions relevant to that category.
- Separate GST from TCS. Reconcile any section 52 TCS entry separately from GST charged on the transport supply.
- Review valuation. If delivery is bundled with goods or another service, obtain advice under the applicable valuation provision instead of relying on the invoice layout.
- Validate the invoice. Confirm required particulars, the 30-day service-invoice timing rule where applicable and the GTA-specific details if the supplier is a GTA.
Common mistakes and how to correct them
- Applying 18% to every delivery line. Correct it by identifying whether the service is local delivery, GTA, courier, multimodal or residual goods transport.
- Assuming the platform always pays. Apply section 9(5) only to a notified service and the stated registration condition; otherwise identify the actual supplier liable under the applicable rule.
- Treating TCS as GST. Reconcile TCS under section 52 separately from tax charged on the delivery supply.
- Calling every road movement GTA. Check the statutory service definition and the contract; the FAQ specifically excludes local delivery provided by and through an ECO from GTA scope.
- Using the 5% multimodal example as a universal freight rate. Confirm whether the contract and transport legs match the FAQ’s no-air example and the current schedule.
- Ignoring invoice particulars. Request a corrected tax invoice, especially where a GTA invoice lacks consignment, vehicle, route or liable-person details.
- Deciding valuation from the checkout layout. A separate freight line does not settle whether delivery is a separate supply or part of another supply’s value.
What a buyer or business should retain
Keep the tax invoice, order and delivery terms, proof of payment, transporter agreement, consignment records and any ECO settlement statement. These documents show the supplier, the service category, the payment path and the basis for section 9(5) or section 52 treatment. For disputed charges, ask the platform or transporter to state the GST classification and the person treated as liable, rather than accepting an unexplained “shipping tax” label.
The safest conclusion is narrow but useful: local delivery through an ECO has an official FAQ rate of 18%, with liability shifting to the ECO only in the specified non-registration case. Other delivery and logistics charges require their own classification, schedule entry, invoice review and valuation analysis. Confirm the operative notification and any amendment in force on the transaction date before taking a final filing position.
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