GST on Courier Services: Rate by Delivery Type & B2B Implications
Courier services are essential for businesses, especially in the age of e-commerce, same-day delivery, and global trade. But when it comes to billing and compliance, understanding the GST on courier services is crucial. Whether you’re a logistics provider, an online seller, or a customer receiving goods, knowing the applicable tax rates, HSN codes, and Input Tax Credit (ITC) rules can help you manage costs and stay compliant.
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Is GST Applicable on Courier Services?
Yes, Goods and Services Tax (GST) is applicable on most courier and logistics services in India. As per the GST regime:
- All courier services attract 18% GST, whether it’s intra-state or inter-state.
- The tax is charged on the total courier charges including handling, pickup, and fuel surcharge.
- GST applies to both individuals and businesses, unless exempted under special conditions (e.g., government to government dispatches).
GST Rate on Courier Charges by Service Type
| Courier Service Type | GST Rate | Tax Type |
|---|---|---|
| Domestic Courier (Non-Govt.) | 18% | CGST + SGST / IGST |
| International Courier | 18% | IGST |
| Speed Post (India Post) | Exempt | – |
| Government Postal Services | Exempt | – |
HSN Code for Courier Services
Courier and express parcel delivery services fall under the SAC Code 996812.
| Service Description | SAC Code | GST Rate |
|---|---|---|
| Courier Services (Private) | 996812 | 18% |
| Postal/Speed Post (Govt.) | 996811 | Exempt |
Input Tax Credit (ITC) for Businesses
Businesses that use courier services for official or commercial purposes can claim Input Tax Credit on the GST paid.
To claim ITC:
- The business must be GST-registered.
- The invoice should contain the correct GSTIN, SAC code, and tax breakup.
- The courier service must also be registered under GST and file returns regularly.
However, ITC is not available if the courier service is used for:
- Personal deliveries
- Free samples or gifts
- Employee reimbursements (not linked to business)
B2B vs B2C Implications
For B2B (Business-to-Business):
- GST is applicable at 18%
- Eligible for ITC
- Must issue GST-compliant invoices
For B2C (Business-to-Consumer):
- 18% GST charged but no ITC available to the customer
- Businesses must report B2C transactions in their GST returns
Understanding the courier GST rate helps you ensure transparency in shipping charges and tax calculation.
Conclusion
Understanding the Goods and Services Tax (GST) on courier services is vital for businesses, especially those involved in shipping goods domestically or internationally. With a standard GST rate of 18% on courier charges, correct invoicing and the appropriate Service Accounting Code (SAC) usage are essential for smooth compliance. Businesses can also benefit from Input Tax Credit (ITC) to reduce their tax liability, while consumers should be aware of the tax component included in shipping costs.
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As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience.
Frequently Asked Questions (FAQs)
- What is the gst for courier services in India?Most private courier services attract 18% GST.
- Are postal services like Speed Post taxable under GST?No, Speed Post and India Post services are exempt from GST.
- Can I claim ITC on courier charges for my e-commerce business?Yes, if the courier invoice includes your GSTIN and the service is used for business purposes.
- What is the SAC code for courier services under GST?The SAC code is 996812 for courier and express parcel services.
- Does GST apply to international couriers?Yes, international courier services attract 18% IGST.
