Starting Sept 22, 2025, the CBIC has announced that local delivery services, including those for groceries, food, and essential items ordered online, will be subject to an 18% Goods and Services Tax (GST). This change may lead to increased costs for consumers making online purchases.
In its most recent FAQ, the CBIC clarified the application of tax based on the entity providing the delivery service and whether the service is facilitated through an e-commerce operator (ECO). This explanation helps to delineate the tax implications in various delivery scenarios.
Clarification of CBIC
- Direct delivery by a registered person: 18% GST is subject to being paid by the supplier.
- Delivery via ECO by an unregistered person: 18% GST to be paid by the e-commerce operator (ECO) u/s 9(5).
- Delivery via ECO by a registered person: 18% GST is liable to be paid via the registered delivery partner, not the ECO.
Its Significance
The ambiguity in a fast-rising sector where millions of consumers rely on last-mile delivery platforms for day-to-day needs has been eliminated by the clarification.
Consumers from this area are required to pay slightly higher delivery charges as operators pass on the tax burden. For e-commerce players, particularly working with unregistered delivery partners, compliance obligations will rise.
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According to the experts from the industry, the same decision shall carry effective tax uniformity and accountability in the gig-driven delivery economy, and for the exchequer, plugging revenue leakages.
