Ordering groceries, food, or essentials online may soon get a little more expensive as the Central Board of Indirect Taxes and Customs (CBIC) has clarified that local delivery services will be taxed at 18% under GST starting September 22, 2025.
In its latest FAQ, CBIC explained how the tax will apply depending on who provides the delivery service and whether it is routed through an e-commerce operator (ECO).
What CBIC clarified:
- Direct delivery by a registered person: 18% GST payable by the supplier.
- Delivery via ECO by an unregistered person: 18% GST to be paid by the ECO under Section 9(5).
- Delivery via ECO by a registered person: 18% GST payable by the registered delivery partner, not the ECO.
Why it matters
The clarification removes ambiguity in a fast-growing sector where millions of consumers rely on last-mile delivery platforms for daily needs. For consumers, this could mean slightly higher delivery charges as operators pass on the tax burden. For e-commerce players, especially those working with unregistered delivery partners, compliance obligations will now increase.
Industry experts believe the move will bring greater tax uniformity and accountability in the gig-driven delivery economy, while plugging potential revenue leakages for the exchequer.
Source from: https://www.cnbctv18.com/economy/gst-alert-local-delivery-services-18-pc-tax-says-cbic-ws-l-19676032.htm
