Impact Of GST On Shipping And Delivery Charges

Impact Of GST On Shipping And Delivery Charges

Written by Deepak Bhagat, In General, Published On
September 8, 2020
Last modified on December 14th, 2021

The application of the goods and services tax (GST) has made the entire process of taxation quite simple, with lesser involvement of bureaucracy. At a basic level, GST has positively impacted all leading industries, and the Delhi Transport Services and Logistics industry has benefited the most. The introduction of GST has affected its shipping and delivery operations and ushered necessary reforms in the logistics and Online Delhi transport sector which is unorganized.

With GST, the entire Delhi transport and logistics infrastructure in India will change and become more competitive and optimal. According to Online Transport company executives, Implementation of GST has helped speed up the movement of trucks online. The benefits of GST in the transport industry are indisputable.


Impact of GST on the transportation industry

  • GST has impacted the structure and rates of taxation positively in the transport industry
  • In its unified taxation structure, entry tax, OCTROI will be removed thus reducing the burden of paperwork for transporters
  • It has made shipping and delivery operations more efficient and hassle-free.
  • facilitates quick movement of vehicles across borders.
  • The consolidation of smaller stock-transfer warehouses into large warehouses
  • Greater up-time for trucks,
  • Has improved capacity utilization.
  • Lesser wastage of time
  • Reduced paperwork will result in faster turnaround time for trucks
  • A more optimal warehousing structure
  • It will lead to greater efficiencies,
  • It has led to better use of technology
  • It has more cost advantages
  • GST will enable the logistics industry to reach its potential in terms of matching exemplary service levels and growth.

 Should GST be levied on delivery charges?

  • One needs to implement GST on delivery charges
  • If the services are taken through the seller of the goods and the amount is charged through an invoice, then GST shall be chargeable at the same rate as that of goods sold.
  • In case the delivery is taken by the purchaser through its own source and the amount of services is paid by the purchaser directly, then the rate of GST shall be normal

Implementation of GST on shipping and delivery charges

  • GST is to be put on the total amount charged to the customer.
  • According to the guidelines issued by the government, the Services of goods transport agency (GTA) concerning the transportation of goods also include transportation of household goods for personal use attracts GST charges at the rate of approximately 2.5% or 6% CGST.
  • The identical rate would be applicable for GST also, taking the effective rate to 5% or 12%. reduction of overall logistics costs
  • the transport industry will be able to avail tax credits for its purchases of goods and capital goods, be its trucks, delivery vans, or packing machinery.
  • Exploring different supply chain models with the clients
  • Increased business volumes,


How GST will lead to a more organized transport sector


  • Lesser interstate compliance
  • Implementing GST will lead to the transport industry getting more focused and organized.
  • The principal transporters will connect the manufacturers with the hubs.
  • The subsidiary transporters will move from the hubs to the distribution centers.
  • There will be the last-mile transporters who will ensure customer delivery.
  • This structure will lead to higher competitiveness, more efficient sourcing, and Organized Trucking.
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