GST on Local Delivery Through E-commerce Operators (Section 9(5)): Who Pays and What Sellers Should Check

From 22 September 2025, local delivery services booked through an e-commerce operator (ECO) are taxed at 18% GST, and where the person doing the delivery is not liable for registration, the ECO pays the tax under Section 9(5) of the CGST Act. The legal entry is in Notification 17/2025-Central Tax (Rate), dated 17 September 2025. This page is general information, not tax advice; confirm your position with a chartered accountant.

What did the GST Council decide?

The 56th GST Council's press release recommended that local delivery services be notified under Section 9(5) of the CGST Act where the person supplying them through an ECO is not liable for registration, at a rate of 18%, and that local delivery services provided by and through an ECO be excluded from the scope of GTA services. The notification followed on 17 September 2025.

What does Section 9(5) mean here?

Normally the person who supplies a service pays the GST on it. Section 9(5) of the CGST Act lets the government name certain services where the ECO is treated as the supplier and pays the tax instead. The September 2025 changes list local delivery services through an ECO, where the person supplying the service through the ECO is not liable for registration, among the services under Section 9(5). The same summary shows the notification as No. 17/2025-CT(R), dated 17 September 2025, amending No. 17/2017-CT(R), effective from 22 September 2025.

That summary, prepared by the West Bengal GST Policy Planning Unit, carries a disclaimer that it is clarificatory and that readers should check the original notifications. Treat it as a pointer, not the legal text.

Who pays the 18%?

A2Z Tax Corp, a tax consultancy, summarises CBIC's FAQ on this as follows:

This is a consultancy's summary of CBIC's FAQ, and we did not open the CBIC FAQ itself. The page also does not name a notification, and it says nothing about a registration exemption. Read the CBIC text before you rely on the table.

What does this mean for a product seller on a marketplace?

If you sell goods on Amazon, Flipkart, Meesho or a quick commerce app, the delivery rule above is mostly about the delivery service, not your goods. The rider or courier partner and the platform deal with the delivery supply. You still charge GST on your goods at the rate for your product, and the marketplace still collects tax at source on your net taxable sales. For TCS, see our guide to GST TCS for e-commerce sellers.

How a delivery or shipping fee shown to the customer is taxed when you sell goods is a separate question, and the sources we opened do not answer it. It depends on how the fee is billed, whether it is part of a composite supply with the goods, and who issues the invoice. Ask your accountant, and look at how your own marketplace invoices that fee.

The rule is more relevant to you if you do one of these:

• You run your own delivery riders and take orders through an app or platform.
• You are a logistics or delivery business that gets bookings from a platform.
• You are an aggregator or D2C business that lists a delivery service on someone else's platform.
• You receive platform invoices for delivery or logistics and claim input tax credit on them.

How does it show up in returns?

An ECO that is liable under Section 9(5) reports these supplies in its own returns. The October 2026 amendment to the CGST Rules changes composition form CMP-08 so that outward supplies of services made through an ECO where the ECO pays tax under Section 9(5) are reported separately in Table 1(b), and it says composition taxpayers are not required to discharge tax liability on such supplies, although the supplies count towards aggregate turnover. That amendment is Notification No. 05/2026-Central Tax, dated 26 October 2026, and it generally comes into force on 1 November 2026 unless a provision says otherwise.

On the recipient side, Section 9(5) invoices issued by e-commerce operators are among the documents shown in the Invoice Management System. If your business receives such an invoice, review it in IMS before your GSTR-3B. See our IMS guide.

What should you check this month?

1. List every delivery or logistics service your business buys or sells through a platform.
2. For each one, find out who the supplier is in the platform's own invoice or terms.
3. Check whether the platform treats the delivery partner as registered or unregistered, because the table above changes with that.
4. Check that the invoice shows 18% and the correct GSTIN.
5. Ask your accountant whether you can claim input tax credit on what you are billed.
6. Keep the notification and the platform's terms on file with your records.

For example, suppose a platform bills you ₹500 for a delivery service plus 18% GST. GST is ₹90 and the total is ₹590. Whether you can use the ₹90 as input tax credit depends on your registration type and the nature of the supply. Your accountant should decide that.

How is this different from TCS?

Section 9(5) and tax collected at source (TCS) under section 52 are two separate mechanisms, and sellers mix them up. Under Section 9(5) the operator pays GST on a service as if it were the supplier. Under section 52 the operator collects a small percentage from a seller's payout for goods sold and deposits it with the government, and the amount shows up in the seller's electronic cash ledger through the operator's GSTR-8. The Council's FAQ also says an operator cannot pay TCS using its own input tax credit. The two can apply to the same platform at the same time, for different supplies.

Will this change what riders or delivery partners earn?

We have not seen any platform publish a change in rider payouts tied to this rule, and we do not speculate on it. If you work with delivery partners directly, ask how the platform now invoices them, and whether payouts are shown with or without the 18% GST. A written confirmation from the platform is better than a phone call.

What is not confirmed?

We could not confirm several points from primary sources, so do not treat them as settled. The CBIC FAQ itself, the exact wording on who counts as a person "not liable for registration", and whether any registration relief applies to delivery partners were not available to us. The platform-level billing, such as how Blinkit, Zepto, Swiggy Instamart, Amazon or Flipkart now invoice delivery services, is set in their own terms. See the Blinkit seller fees guide for fee structure on a quick commerce platform.

FAQ

Is GST charged on local delivery through an e-commerce platform? Yes, local delivery services are taxed at 18% from 22 September 2025. Who pays that tax depends on whether the delivery partner is registered, so read the platform's invoice terms.

Who pays GST when an unregistered rider delivers through a platform? The ECO pays 18% under Section 9(5), according to a tax consultancy's summary of CBIC's FAQ. Confirm in the notification text.

Does a product seller have to pay this GST? Usually the seller of goods does not pay GST on a platform's delivery supply. You pay GST on your goods at their rate. If you also supply delivery services through a platform, speak to your accountant about your position.

Which notification applies? It is Notification 17/2025-Central Tax (Rate), dated 17 September 2025, which amended the earlier Notification 17/2017 on services where the operator pays tax.

Do composition taxpayers pay tax on these supplies? The 2026 rule amendment says composition taxpayers are not required to discharge tax liability on supplies where the ECO is liable under Section 9(5).

Does this change the GST on my goods? No. It concerns the delivery service. Your goods stay at their own rate, which you can check with our GST rate finder.

What next?

If you sell through quick commerce platforms and want help with listings, availability and ads, see Blooprint's quick commerce management. Keep delivery-tax questions with your accountant.