The GST treatment of transportation and delivery services connected with e-commerce transactions depends on the nature of the service and the registration status of the service provider.
The 57th GST Council meeting recommended changes to clarify the applicable GST rate and the person responsible for paying tax on certain transportation and delivery services involving goods ordered or supplied through an e-commerce operator.
An important distinction has been drawn between:
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Transportation services supplied by a Goods Transport Agency (GTA); and
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Other delivery services connected with goods ordered or supplied through an e-commerce operator.
These categories should not be treated as interchangeable because the applicable tax treatment and liability may differ.
1. Proposed GST Rate for Delivery Services
The GST Council recommended a 5% GST rate, without input tax credit (ITC), for specified delivery services related to goods ordered or supplied through an e-commerce operator.
The availability of this treatment and the person liable to pay GST depend on the applicable provisions and the registration status of the delivery service provider.
A 5% rate without ITC means that the service provider cannot claim input tax credit in respect of the inputs and input services covered by the restriction applicable to this rate.
2. Who Will Pay GST on Delivery Services?
The recommended treatment distinguishes between registered and unregistered delivery service providers.
A. Delivery service provider not liable to obtain GST registration
Where the delivery service provider is not liable to obtain GST registration, the e-commerce operator may be liable to pay GST under Section 9(5) of the CGST Act, subject to the applicable notification and conditions.
In this situation, the e-commerce operator is responsible for discharging the GST liability assigned to it under the notified provisions.
B. Delivery service provider liable to obtain GST registration
Where the delivery service provider is liable to obtain GST registration, the recommended framework places the responsibility for payment of GST on the service provider.
Accordingly, the e-commerce operator does not automatically become liable under Section 9(5) merely because the delivery service is connected with an e-commerce transaction. The applicable legal conditions must be examined.
3. What Does Section 9(5) of the CGST Act Mean?
Section 9(5) empowers the Government to notify specified categories of services supplied through an electronic commerce operator for which the operator is liable to pay GST as if it were the supplier.
This provision creates a special mechanism for determining tax liability. In cases covered by a valid notification, the GST liability may shift to the e-commerce operator even though the underlying service is supplied by another person.
However, Section 9(5) does not apply to every service supplied through an e-commerce platform. Its application depends on the notified category of service and the conditions prescribed for that category.
For this reason, businesses should not assume that the e-commerce operator will pay GST on every delivery transaction.
4. GTA Transportation Is Different from Other Delivery Services
The Council's recommendations separately address transportation services supplied by a Goods Transport Agency (GTA) in relation to goods ordered or supplied through an e-commerce operator.
For such GTA services, the recommended rate structure is:
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5% GST without ITC; or
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18% GST with ITC, subject to the applicable rate entry and conditions.
The Council also recommended that the exemption under Entry 21A should not be available to the specified GTA transportation services connected with goods ordered or supplied through an e-commerce operator.
Importantly, the e-commerce operator is not proposed to be liable under Section 9(5) for these GTA services. The GTA remains responsible for paying GST under the applicable provisions.
Therefore, businesses must identify whether the service is a GTA transportation service or another delivery service before determining the correct tax treatment.
5. What About Individual Truck Owners and Operators?
The recommendations clarify that the existing treatment applicable to individual truck owners or operators remains unchanged.
Accordingly, the proposed changes concerning GTA services should not be interpreted as automatically changing the GST treatment of every individual truck owner or vehicle operator.
The nature of the service, the legal status of the supplier and the applicable exemption or rate entry must be examined separately.
6. Practical Examples
Example 1: Delivery service provider not liable to registration
An e-commerce platform engages a delivery service provider who is not liable to obtain GST registration. If the transaction falls within the notified category covered by Section 9(5), the e-commerce operator may be responsible for paying GST under the applicable provisions.
Example 2: Delivery service provider liable to registration
A delivery service provider is liable to obtain GST registration. Under the recommended framework, the service provider is responsible for paying GST on the covered delivery service, subject to the applicable notification and rate conditions.
Example 3: GTA transporting goods ordered through an e-commerce platform
A registered GTA transports goods connected with an e-commerce order. The applicable GTA rate and ITC conditions must be examined. Under the Council's recommendation, the GTA remains responsible for GST, and the e-commerce operator is not liable under Section 9(5) for that GTA service.
These examples are illustrative. The final tax treatment depends on the actual transaction and the provisions in force.
7. Compliance Points for E-Commerce Operators and Delivery Businesses
Businesses should consider the following steps:
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Identify whether the service is GTA transportation or another delivery service.
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Verify the GST registration status of the service provider.
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Examine whether the service falls within a category notified under Section 9(5).
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Apply the correct rate and ITC restrictions.
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Maintain agreements, invoices and records showing the nature of the service and the party responsible for GST.
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Review the relevant notifications before implementing any change in invoicing or return reporting.
8. Are These Changes Already Applicable?
The above changes are based on recommendations made at the 57th GST Council meeting held on 8 October 2026.
A GST Council recommendation should not, by itself, be treated as proof that a rate change or liability provision has become legally effective. The relevant notification and its effective date must be checked before changing tax invoices, accounting treatment or GST returns.
Businesses should therefore verify the applicable Central and State GST notifications, as relevant, before implementing the proposed treatment.
Conclusion
The key takeaway from the 57th GST Council recommendations is that GTA transportation and other delivery services connected with e-commerce transactions may have different GST treatments and different persons responsible for paying tax.
For specified delivery services, the recommended framework provides for a 5% rate without ITC, with Section 9(5) liability depending on the registration status of the service provider and the applicable notification. For specified GTA transportation services, the recommended rate options are 5% without ITC or 18% with ITC, with the GTA remaining liable for GST.
E-commerce operators, delivery businesses and transport service providers should distinguish between these categories and confirm the effective legal provisions before making compliance changes.
Disclaimer: This article is for general information and educational purposes only. It summarises GST Council recommendations and does not replace the applicable Acts, Rules, notifications or circulars.