Namaste DOST!

You open an invoice. Product price looks fine. Then your eyes land on delivery charges.

And the question hits you instantly, “GST lagega ya nahi?”

This Advance Ruling answers that question. Quietly. Clearly. And very practically.

Summary (What, Why, Outcome)

This case revolves around a simple but often misunderstood GST question: whether delivery or transport charges collected from unregistered end customers attract GST when goods are transported by road and a consignment note is issued. Flipkart India Private Limited approached the West Bengal Authority for Advance Ruling to clarify the GST treatment of its proposed transportation model for delivering goods purchased through e-commerce portals.

The Authority examined whether such transportation qualifies as a Goods Transport Agency (GTA) service and whether GST exemption applies when the recipient is an unregistered person. After analysing the model, the applicable notifications, and the definition of “recipient” under the CGST Act, the Authority ruled that the service qualifies as GTA. However, it further held that when such GTA services are provided to eligible unregistered persons, they are exempt from GST under Entry 21A of Notification No. 12/2017. The ruling brings much-needed clarity to delivery charge taxation under GST.

Facts of the Case (Background)

Flipkart India Private Limited, an e-commerce company, proposed a logistics model for transporting goods purchased by customers on online platforms. Under this model, goods sold by sellers are first delivered to designated hubs. From there, Flipkart or its logistics arm transports the goods to the end customers.

The transportation is carried out exclusively by road using vehicles such as trucks, vans, or two-wheelers. Importantly, for every such movement, Flipkart issues a single consignment note and collects the transportation or delivery charges from the end customer, either online or through cash on delivery.

Before implementing this model, Flipkart sought clarity from the West Bengal Advance Ruling Authority on the applicable GST treatment. The concern was whether such transportation constitutes a GTA service and whether GST would be payable on delivery charges collected from customers who are not registered under GST.

Legal Issue

The Authority was required to answer two core legal questions:

1. Whether the proposed transportation of goods by road, accompanied by issuance of a consignment note, qualifies as a Goods Transport Agency (GTA) service under GST law.

2. Whether such GTA services, when provided to unregistered end customers, are exempt from GST under Entry 21A of Notification No. 12/2017-Central Tax (Rate).

Arguments by the Applicant

The applicant submitted that its proposed activity satisfies all elements of a GTA service because goods are transported by road and a consignment note is issued for each movement. It further argued that as per Notification No. 12/2017, GTA services provided to unregistered persons are exempt from GST, subject to specific exclusions.

Flipkart also clarified that it merely collects transportation charges on behalf of the customer and that the end customer remains the recipient of the service under Section 2(93) of the CGST Act.

Authority’s Decision

The West Bengal Authority for Advance Ruling, in Order No. 15/WBAAR/2025-26 dated 09 December 2025, ruled in favour of the applicant.

Classification as GTA

The Authority observed that a Goods Transport Agency is defined as a person who provides service in relation to transport of goods by road and issues a consignment note. Since Flipkart’s proposed model involved transportation by road along with issuance of a consignment note, the activity squarely fell within the definition of GTA.

GST Exemption for Unregistered Customers

The Authority further examined Entry 21A of Notification No. 12/2017-CT (Rate), which provides exemption to GTA services supplied to certain categories of unregistered persons, excluding specified entities such as factories, societies, companies, partnership firms, and similar bodies.

Applying Section 2(93) of the CGST Act, the Authority held that the recipient of the service is the person liable to pay consideration. In this case, since the end customer pays the delivery charges, the end customer is the recipient. Therefore, where such recipient is an eligible unregistered person, the GTA service is exempt from GST.

Accordingly, both questions were answered in favour of the applicant.

Legal Reasoning & Analysis

This ruling rests on three clear legal pillars.

First, the issuance of a consignment note is decisive. It indicates that the transporter assumes responsibility for the goods, including custody and risk. Once this happens, the service moves out of the category of “mere road transport” and becomes GTA.

Second, GST exemption under Entry 21A is recipient-centric, not service-centric. The same GTA service can be taxable or exempt depending on who receives it. This is often missed.

Third, the Authority relied on the statutory definition of “recipient” under Section 2(93). Payment liability, not platform mechanics, determines recipient identity. The presence of an e-commerce operator does not shift GST liability when the operator merely collects charges on behalf of the customer.

Think of it like this: GST law doesn’t care who holds the basket. It cares who pays the bill.

Important Message for Every Business Owner

• Consignment note matters. Once issued, GTA rules apply, and exemption must be tested carefully.

• Unregistered does not mean automatic exemption. The legal constitution of the recipient matters.

• Payment flow decides GST fate. Who pays the delivery charge decides who the recipient is.

• Invoice narration is crucial. Mentioning the exemption entry avoids future disputes.

• One model, multiple outcomes. The same delivery service can be taxable for one customer and exempt for another.

Why This Matters

Delivery charges are a regular audit trigger under GST. This ruling provides clarity on how exemptions operate in real business models, especially e-commerce logistics. It reinforces that GST outcomes depend more on structure and documentation than on assumptions.

Conclusion

At first glance, this case looks like a simple ruling on delivery charges. But look closer, and it tells a deeper GST story.

A story about definitions. About who pays. About what a single document can change. And about how GST law rewards clarity, not shortcuts.

At GST DOST, we see this every day.
Compliance is not about fear. It’s about understanding the map before you start the journey.

📞 Need help with delivery charge GST, GTA classification, or audit queries? Contact GST DOST for personalised support.

FAQ

Q: What was the dispute in this case?

A: Whether delivery charges collected by Flipkart for road transportation with consignment notes attract GST when charged to unregistered customers.

Q: How did the Authority rule?

A: The Authority held that the service qualifies as GTA but is exempt from GST when supplied to eligible unregistered persons under Entry 21A.

Q: Does GTA service always attract GST?

A: No. GTA services can be exempt or taxable depending on the recipient category, as clarified in this ruling.

Q: Who is considered the recipient of delivery services?

A: The person liable to pay the delivery charges, as per Section 2(93) of the CGST Act.

Q: Will GST be charged on delivery charges collected from an unregistered customer?

A: If the delivery service qualifies as a GTA (Goods Transport Agency) service and is provided to an eligible unregistered person, then GST is not payable on such delivery charges under Entry 21A of Notification No. 12/2017-Central Tax (Rate).

References

• In re: Flipkart India Private Limited,
  West Bengal Authority for Advance Ruling,
  Order No. 15/WBAAR/2025-26 dated 09.12.2025.

• Section 2(93), Central Goods and Services Tax Act, 2017 – Definition of “Recipient”.

• Notification No. 12/2017-Central Tax (Rate) – Entry 18 and Entry 21A.

Written by CA Vikash Dhanania | Reviewed by GST DOST Legal Research Team | Updated on 12/12/2025.

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