GST Council Recommends 5% Rate for E-commerce Delivery Services

At its 57th meeting on 8 October 2026, the GST Council recommended a 5% Goods and Services Tax (GST) rate without input tax credit (ITC) on delivery services for goods supplied through electronic commerce operators. The Central Government issued Notification No. 09/2026-Central Tax (Rate) on 27 October, with the revised treatment taking effect from 1 November 2026.

Tax treatment and requested deferment

The 5% rate, reduced from the earlier 18%, excludes postal and courier services. Under Sections 9(5) and 22(1) of the Central Goods and Services Tax Act, 2017, the electronic commerce operator must pay the GST when the delivery service provider is not liable to register.

On 28 October, the National Association of Software and Service Companies (Nasscom) asked the Finance Ministry to defer implementation until 1 January 2027. It cited the time needed to update and test technology, billing, accounting and tax systems, including enterprise resource planning configurations, invoicing and GST compliance processes. Nasscom also called for consultation with e-commerce operators and logistics providers to clarify requirements and address implementation challenges.

Important Facts for Exams

• Indian GST: India uses a dual GST: intra-state transactions attract Central GST and State GST, while inter-state transactions and imports attract Integrated GST.
• Indian GST: GST is destination-based: revenue goes to the state where goods or services are consumed, not the state where they are produced.
• GST Council: The GST Council includes the Union finance minister and state counterparts, and recommends tax rates, rules and regulations.
• Indian GST: GST is levied at successive production and distribution stages, with businesses claiming input tax credits; the consumer bears the ultimate burden.