GST Updates

GST on Delivery Services: CBIC Fact-Check and the 5% Proposal

CBIC rejects the fresh-tax claim. Understand the 57th Council's 5% delivery recommendation, who would pay, the GTA exception and what Kerala businesses should check before changing invoices.

NRS Editorial Desk · Published 2026-10-13 · 13 min read

Is there a new GST on delivery services? CBIC says the viral fresh-tax claim is incorrect: its 10 October 2026 clarification describes a reduction from 18% to 5% for delivery services such as those provided by food apps. The 57th GST Council recommended 5% without input tax credit for covered e-commerce delivery services. That does not mean every shipping bill, product or platform fee is now taxed at 5%.

What happened on 8 and 10 October 2026?

The important question is not simply whether a headline says ‘new tax’ or ‘tax cut’. A seller needs to know which service is being supplied, who pays GST and which rule is effective for that invoice. The written recommendation and FAQs give a more useful answer than an isolated screenshot.

What the 5% GST on delivery services actually means

Part C2, item 2 of the Council release has three distinct limbs. First, delivery services supplied through an electronic commerce operator, excluding courier and postal services, would come within Section 9(5) where the delivery provider is not liable to register under Section 22(1). Second, 5% without ITC is recommended for delivery services relating to goods supplied or ordered through an ECO. Third, a specified GTA exemption would be withdrawn for covered ECO-linked transport to unregistered persons.

An electronic commerce operator, or ECO, is the platform in this discussion. The goods seller, restaurant, platform, delivery partner and transport agency may be different persons. Do not treat them as one taxpayer merely because they appear on the same order screen.

Who pays: the platform, delivery partner or online seller?

FAQ Q16 turns on whether the delivery service provider is liable to register. In the specified below-threshold provider case, the ECO would discharge the recommended tax under Section 9(5). Where that provider is liable to register, the FAQ places payment with the provider. ‘Not liable to register’ is a legal test, not simply a missing GSTIN on a settlement report.

Section 9(5) liability for notified services is different from saying the platform collects tax at source on marketplace goods. It also does not automatically transfer every GST obligation of the seller to the platform. Review the actual contract, supply and applicable notification. The seller's registration and return obligations need their own assessment.

Section 9(5) delivery liability is not entirely new

Notification 17/2025-Central Tax (Rate), effective 22 September 2025, already added local delivery through ECOs to the existing Section 9(5) notification, except where the provider is liable to register under Section 22(1). That earlier notification is useful history; it does not establish that the new recommended 5% rate is effective from September 2025.

The Council also recommended a broader clarification concerning ECO business models. Do not merge that proposed law clarification with the service-rate notification or assign all delivery changes the wider process-reform rollout date. Each implementing instrument must be checked for its own scope and commencement.

Does ‘without ITC’ block every buyer's input tax credit?

No blanket buyer-credit conclusion follows from those two words. In concessional service-rate design, the no-ITC condition generally concerns the supplier's credit on inputs and input services used to provide that output service. CBIC's original service-rate notification explains that distinction. The final delivery-rate wording must still be checked.

A registered business receiving the delivery service has a separate credit assessment under Sections 16 and 17: business use, the proper tax document, receipt of service, applicable reporting and other conditions, as well as blocked-credit or exempt-use restrictions. A consumer cannot claim business ITC; a composition taxpayer or an exempt-output business cannot assume full recovery either. Being GST-registered alone does not make every charge creditable.

For an ordinary restaurant operating under a no-ITC output condition, input GST may remain a cost. A taxable retailer's position may differ. Ask whose input tax is being discussed before using an ITC claim in a pricing calculation. The separate Council proposal about same-line-of-business credit for restaurant services is not automatic permission to claim every delivery-related input.

GST on delivery charges: a ₹100 comparison that avoids misleading savings

These are conditional illustrations, not a statement of a particular platform's current billing. Assume the same qualifying delivery service has a pre-tax value of ₹100, the recommended rate becomes effective for that service, and the base fee does not change.

The rate moves down by 13 percentage points, which is a 72.22% reduction in the tax component when comparing 18 with 5. It is not a 72.22% reduction in the entire order price. The last row is a sensitivity example; whether a particular GTA service was exempt and which rate it would use require checking the transport facts and applicable option.

If ₹100 is already tax-inclusive, the arithmetic is different. Included GST is ₹100 × 18/118 = ₹15.25 at 18%, or ₹100 × 5/105 = ₹4.76 at 5%, rounded to two decimals. The customer still pays ₹100 if the inclusive price is held fixed. Do not mix an inclusive price with an exclusive-fee comparison.

Food, delivery and platform fees are separate checks

An app order can include food or goods, packing, a delivery service, platform fees and discounts. The delivery recommendation does not by itself change the tax classification of the product, restaurant supply or platform fee. A separate delivery provider's invoice is also different from a seller's naturally bundled supply of goods with incidental freight.

• Check the supplier and recipient shown for each charge, not only the app's name.
• Identify whether delivery is a separate service or part of a composite supply; a separate invoice line alone does not settle classification.
• Keep the tax on the food or goods separate from the tax on delivery and other platform services.
• Compare the pre-tax fee, discounts and inclusive total before calling a rate change a customer saving.
• If an invoice appears wrong, ask for its legal basis and any valid correction document. Do not simply deduct the disputed tax from settlement or claim credit from a screenshot.

This is why questions such as ‘GST on Swiggy delivery’, ‘Zomato delivery GST’ or ‘GST on quick-commerce charges’ need the actual bill and supply model. This guide does not verify a particular app's rollout, declare an existing bill unlawful or promise that its next bill will be cheaper.

What Kerala sellers and restaurants should check in Kozhikode, Manjeri and Malappuram

The GST principles are national; Calicut and Kozhikode are the same city, not different tax jurisdictions. Local relevance comes from applying the rules to the business's documents. The following are illustrative situations, not client cases or claims about particular platforms.

Do not assume that using your own vehicle settles the matter. For the proposed wider delivery limb, the source of the goods order or supply matters too. Equally, a direct offline sale with delivery does not automatically become an ECO service. Map the facts before changing the rate, claiming an exemption or switching a delivery contract.

A five-document delivery-GST review for your accounts team

• Order record: identify the platform, order date, goods or service, customer and order value.
• Customer invoice: separate the principal supply, freight or delivery, platform charges, tax and discounts.
• Delivery or transport document: identify the provider, GSTIN or registration liability, recipient, service description and any consignment note.
• Platform agreement and settlement: establish who contracts for each supply, who bears each fee and how deductions reconcile to invoices and the bank receipt.
• Legal and credit file: retain the applicable notification, effective date, rate-entry conditions and recipient ITC assessment. Reconcile the relevant invoices with the books and GST records.

Then request a written implementation note from the relevant platform or provider: which supplies change, from which invoice date, who pays, how input credit is treated and what happens to refunds or cancellations around transition. Retain the underlying notification rather than relying only on that commercial note. Continue filing on time under the law applicable to your transaction.

GST consultancy for Kerala delivery-linked businesses

NRS and Associates supports GST classification, registration, return reconciliation and input-credit reviews through its Kozhikode and Manjeri offices, including businesses across Malappuram district and Kerala. For a delivery-GST review, start with the five-document file above and describe the exact invoicing or reconciliation issue. A useful review follows the transaction from order to invoice to settlement, rather than applying one headline rate to every deduction.

Frequently asked questions about delivery GST

Has a new 5% GST been imposed on delivery services?

CBIC's 10 October 2026 clarification rejects the claim of a fresh levy and describes a reduction from the earlier 18% treatment for services such as food-app delivery. The 57th Council recommended 5% without ITC for covered e-commerce delivery services. The recommendation, its scope and its legally effective date must be read separately; a social-media post is not an implementing notification.

Is GST on delivery charges 5% or 18%?

There is no single answer for every delivery charge. The Council recommends 5% without ITC for covered ECO-linked delivery services. Its official FAQ separately describes ECO-linked GTA transport at 5% without ITC or 18% with ITC. Courier, postal and delivery bundled with a seller's principal supply require their own classification checks. Use the applicable notification and effective date for the actual invoice.

When does the recommended 5% delivery GST rate take effect?

The Council release does not specify a delivery-specific start date. For invoicing, use the effective date in the applicable CBIC notification covering your service. The Council meeting date and CBIC's social-media clarification do not themselves establish that date, and the broader process-reform timetable should not be applied automatically to delivery rates.

Who pays GST when a delivery partner supplies through an e-commerce operator?

Official FAQ Q16 distinguishes the provider's registration liability. If the delivery provider is not liable to register, the ECO would pay the recommended 5% under Section 9(5). If the provider is liable to register, the provider would pay the recommended 5% under the applicable delivery-service provisions. Apply the notified category, exclusions and commencement before changing returns or invoices.

Does 5% without ITC mean a business customer can never claim delivery GST credit?

Do not infer that blanket conclusion. A concessional output rate without ITC generally restricts input credit used by the supplier to provide that service. The recipient's credit is a separate question under Sections 16 and 17 and the final notification, including business use, invoice and other conditions. Consumers, composition taxpayers and businesses with blocked or exempt-use credit cannot assume recovery.

Are courier and postal services covered by the same Section 9(5) proposal?

The Council expressly excludes courier and postal services from the delivery-services limb proposed for Section 9(5). This is not a GST exemption for couriers. Its separate recommendation for delivery of goods supplied or ordered through an ECO also needs to be read with the final classification and rate text. Do not automatically mark every parcel or courier invoice at 5%.

Does an online seller need GST registration because of the delivery proposal?

The delivery proposal does not by itself answer the seller's registration question. Q16 concerns the delivery provider's liability to register, which may be different from the seller's status. Assess the seller's own goods or services, turnover, states and applicable exemptions or compulsory-registration rules separately. The proposed Rule 14B seller-registration mechanism is a different Council recommendation.

Will Swiggy, Zomato or quick-commerce orders automatically become cheaper?

No particular platform's final price is guaranteed by this announcement. A lower tax rate on a qualifying delivery fee can reduce that component if the pre-tax fee stays unchanged, but product or food tax, platform fees, discounts and credit costs are separate. This guide does not verify any named platform's revised invoice or implementation date.

What changes for a GTA carrying goods ordered through an ECO?

Official FAQs Q12 to Q14 describe 5% without ITC or 18% with ITC and withdrawal of Entry 21A's exemption for the covered ECO-linked transport to unregistered persons. The ECO does not become liable for that GTA service under Section 9(5); the FAQ identifies the GTA as liable as applicable. The Entry 21A exemption for qualifying non-ECO transport is not removed by this proposal.

What should a Kerala seller or restaurant check before changing delivery GST?

Keep an order, customer invoice, delivery invoice, platform agreement and settlement statement together. Identify the goods or restaurant supply separately from delivery and platform fees; check who supplies and invoices each service, registration liability, credit treatment and the implementing notification's effective date. NRS supports GST and reconciliation reviews through its Kozhikode and Manjeri offices, including businesses across Malappuram district.