Summary: The 57th meeting of the GST Council held on 8 October 2026 recommended changes to the GST treatment of delivery and goods transportation services associated with electronic commerce operators (ECOs). These changes have been implemented through Notification No. 06/2026-Central Tax (Rate), Notification No. 07/2026-Central Tax (Rate) and Notification No. 09/2026-Central Tax (Rate), all dated 27 October 2026 and effective from 1 November 2026. The amendments introduce a 5% GST rate without input tax credit for specified delivery services, exclude certain GTA services from an existing exemption and clarify the circumstances in which ECOs are liable to pay GST under Section 9(5) of the CGST Act. They also require platforms to review their delivery arrangements, service classification, invoicing systems, contractual responsibilities and logistics pricing.
- GST Council Recommendations and Revised Tax Treatment of Delivery Services
- Section 9(5) Liability and Tax Implications for E-Commerce Platforms
- Impact on Operating Costs, Pricing and Input Tax Credit
- Revised GTA Definition Calls for Careful Classification of Fulfilment Models
- Distinguishing GTA, Delivery and Courier Services
- Compliance Implications for E-Commerce Platforms
GST Council Recommendations and Revised Tax Treatment of Delivery Services
The 57th meeting of the GST Council held on 8 October 2026 recommended changes to the GST treatment of delivery and goods transportation services associated with electronic commerce operators (ECOs), which have been introduced through Notification No. 06/2026-Central Tax (Rate) issued by the Ministry of Finance (Department of Revenue), together with related notifications governing exemptions and ECO liability.
Specified delivery services through ECOs will now attract a lower GST at 5% from the previous rate of 18% but will no longer be eligible for input tax credit (ITC). At the same time, the exemption available to goods transport agencies (GTAs) under Entry 21A of Notification No. 12/2017-Central Tax (Rate), as amended, has been withdrawn in respect of transportation services relating to goods supplied through an ECO.
The intent is to align tax treatment of different e-commerce delivery services whether it be delivery by the platform’s own delivery riders, third-party logistics providers, or GTAs. The amendments reduce tax rate differences while retaining distinct classification and liability rules.
Section 9(5) Liability and Tax Implications for E-Commerce Platforms
Under Section 9(5) of the CGST Act, the ECO is liable for GST where covered delivery services are supplied through it by a person not liable for registration under Section 22(1). In other cases, the liability remains with the service provider under the applicable provisions. The applicability of Section 9(5) depends on whether the service provider is legally liable for registration under Section 22(1), rather than merely whether the provider holds a GST registration. Preserving this distinction is particularly significant in e-commerce platforms engaging individual delivery partners and smaller logistics providers, many of whom may be registered voluntarily despite not being legally required to obtain registration under Section 22(1).
Impact on Operating Costs, Pricing and Input Tax Credit
Further, while the move towards uniform tax treatment of delivery services is welcomed, these changes will have implications for cost and ERP structures of e-commerce platforms. They will need to assess the impact on operating costs and pricing margins for various delivery arrangements and restructure their service offerings to align with the revised tax treatment. This would also include determining the extent to which any incremental tax costs are absorbed internally or passed on to sellers and customers. Particularly, while the reduced 5% GST rate may reduce headline tax, the ITC exclusion will embed input taxes in the logistics cost thereby affecting delivery economics and pricing.
Revised GTA Definition Calls for Careful Classification of Fulfilment Models
The amendments also exclude transportation services relating to goods supplied through an ECO from the GST exemption available to GTAs and concomitantly revise the definition of a GTA. The previous definition excluded ECOs providing or facilitating local or hyperlocal delivery services, even where such services otherwise involved the transportation of goods by road and issuance of a consignment note. This was designed to distinguish high-volume, local delivery platforms (like food delivery, grocery apps, and local courier aggregators) from traditional commercial freight logistics providers. The revised definition under Notification No. 06/2026-Central Tax (Rate) states that a GTA “means any person who provides service in relation to transport of goods by road and issues a consignment note, by whatever name called”.
Distinguishing GTA, Delivery and Courier Services
With this new definition, the classification of logistics as a GTA service, delivery service or courier service will have greater significance particularly for e-commerce platforms employing multiple fulfilment models. The characterisation will depend on factors such as issuance of a consignment note, contractual allocation of responsibility for carriage and whether the service constitutes independent transportation services, courier services, or part of a broader fulfilment service for supply of goods. Now that delivery of goods through GTAs is no longer covered by the specified exemption under Entry 21A, e-commerce platforms should clearly distinguish delivery services falling within the Section 9(5) framework from independent GTA services, so as to avoid inadvertently assuming tax liability where the GTA or another person is responsible for GST under the applicable provisions.
Compliance Implications for E-Commerce Platforms
As e-commerce matures in India, GST treatment of logistics services relating to the industry is becoming increasingly nuanced. Platforms should review their contractual arrangements, invoicing frameworks and compliance processes across the fulfilment chain to ensure that tax liability is allocated in accordance with the underlying nature of each service as well as the legislative intent of the GST framework governing e-commerce delivery services.
