Nasscom Seeks Deferment Of New GST Rules For Ecommerce Deliveries To Jan 2027

The revised GST rules change both the rate and the coverage of specified ecommerce delivery services. GST falls from 18% to 5%, but providers cannot claim input tax credit. The rules also revise the services for which ecommerce operators must discharge tax liability. They are scheduled to take effect on November 1.

For example, a covered delivery provider would charge or account for GST at 5% rather than 18%. However, it could no longer offset eligible GST paid on business inputs against its output tax. The wording also changes from “local delivery” to “delivery services, other than postal and courier services,” potentially covering more operating models.

The timing is contentious because the rules were notified on October 27. Marketplaces therefore had only a few days to update systems before November 1. Nasscom has asked for implementation to move to January 2027, allowing testing, consultation and preparation.

Nasscom is asking for more time because the revised GST framework requires wide changes across ecommerce and logistics operations. Marketplaces must review the rules, determine how they apply to different business models, and modify technology, accounting and compliance systems. The association says January 2027 would provide an adequate transition period.

The required work includes changing enterprise resource planning configurations, invoices, tax calculations, input tax credit treatment and GST compliance processes. Businesses would also need to test these changes before deployment. For a marketplace working with many delivery partners, a rushed update could affect records, tax treatment and settlement processes.

The rules were notified on October 27 and were due to begin on November 1. Nasscom has therefore requested consultations with ecommerce operators, logistics providers and other affected businesses. It argues that coordinated preparation would prevent avoidable disruptions and clarify unclear requirements before implementation.

The gap between notification and implementation was extremely short. The GST rules were notified on October 27 and scheduled to take effect on November 1. On the calendar, that is about five days, which the article describes as only a few days for companies to comply.

This matters because the changes are not limited to changing a tax percentage. Marketplaces and delivery businesses may need to alter ERP configurations, invoices, tax calculations, input tax credit treatment and wider GST compliance processes. They also need to assess different operating models and test systems before deployment.

Nasscom considers the period inadequate for a coordinated transition. It asked the finance ministry to move implementation to January 2027 and consult ecommerce operators, logistics providers and other affected businesses. The immediate issue is whether the ministry will extend the deadline and give companies time to align with the new regime.

Input tax credit, or ITC, allows a business to offset eligible GST paid on business inputs against the GST it must pay on its output. This mechanism can prevent the same tax from adding repeatedly through the supply chain. The revised rules remove ITC for specified delivery services, even though their headline GST rate falls.

For example, a delivery provider may pay eligible GST on fuel-related services, technology, equipment or other business inputs. Under the new treatment described in the article, it cannot use that eligible input tax to reduce its output GST liability. Its tax rate falls from 18% to 5%, but some input taxes may instead become a cost.

The economic result will differ by business. It depends on each company’s structure and input tax position. Therefore, the lower headline rate may not produce an equivalent reduction in operating costs or customer delivery charges. Businesses must assess both the rate and the lost credit.

The new framework could affect nearly every layer of ecommerce delivery operations. Marketplaces and logistics providers may need to change ERP configurations, invoicing, tax calculations, input tax credit treatment and GST compliance processes. They must also determine which services fall within the revised scope and which party must discharge the tax liability.

For example, a marketplace may need to update its checkout or billing logic, classify delivery services under the new wording and apply 5% GST without ITC. It would then need to test those changes across different operating models and delivery partners. If input GST can no longer be offset, a provider may face higher unrecovered costs despite the lower output rate.

The impact on customers is therefore uncertain. The article says delivery charges may not fall by an equivalent amount, because results depend on each business’s input tax position. A rushed transition could also create compliance problems or avoidable disruptions across the ecosystem.

The revised wording changes the description from “local delivery” to “delivery services, other than postal and courier services.” This appears broader because it is not limited to deliveries identified as local. The change matters for deciding which services fall under the specified GST treatment and which ecommerce operators must discharge tax liability.

For example, an ecommerce platform may need to examine a delivery arrangement that operates across locations but is not a postal or courier service. Under the former wording, its classification might have focused on whether the activity was local. Under the new wording, the platform would need to assess the service against the broader description and apply the relevant tax treatment if covered.

The article does not list every newly affected business. It says marketplaces must examine the notified provisions and assess how they apply to different operating models. Consultations with ecommerce operators and logistics providers could clarify the scope and reduce implementation uncertainty.

India’s GST is generally a consumption tax collected through business transactions. Businesses charge GST on taxable supplies and pay it to the government, while eligible input tax credit can offset GST already paid on business inputs. This makes the final burden depend not only on the stated rate, but also on credits and how a business operates.

For example, two delivery providers may both face a 5% output rate. One may use many taxable inputs and normally rely heavily on ITC; the other may have fewer eligible inputs. If the new rules remove ITC, the first provider could lose more tax offsets, while the second may experience a smaller change. Their costs and pricing could therefore move differently.

The article specifically says the impact depends on each business’s structure and input tax position. That is why reducing GST from 18% to 5% does not guarantee an equivalent reduction in operating costs or customer delivery charges. Marketplaces must assess their own models before deployment.