Archive · 7 Sep 2025
GST Hike Impacts Logistics: Costs Up, Earnings Down
The government is now taxing delivery services, like the ones used by apps like Uber and Rapido, at 18%.
This means things might cost more because companies have to pay more taxes.
Since fuel is a big cost for these companies, but isn't taxed in the same way, it makes it hard for them to lower prices.
This could affect delivery workers, who might earn less, and make it harder for small businesses to compete.
India imposes an 18% GST on delivery services booked via e-commerce platforms.
Logistics companies cannot claim input tax credit (ITC) on fuel, increasing costs.
The tax may lead to higher prices for consumers and reduced earnings for delivery workers.
The tax targets local delivery services, shifting tax liability to the platform.
Companies may absorb some costs or reduce incentives to balance impact.
- Who
- Logistics firms, gig workers, consumers
- What
- Imposition of 18% GST on delivery services
- When
- Recent decision
- Where
- India
- Why
- To collect tax on local delivery services
Consumer/Gig Worker
Logistics Provider
Impact on Earnings/Cost
Consumer/Gig Worker
Higher prices for consumers and lower earnings for gig workers.
Logistics Provider
Increased costs due to inability to claim ITC on fuel
Margin pressure
Consumer/Gig Worker
Lower incomes and labor instability for delivery partners
Logistics Provider
Reducing surge bonuses and/or per-delivery incentives to control costs
- GST Rate on Delivery Services
- 18%
- Tax Application
- E-commerce platforms
- Fuel
- Outside GST, no ITC
- Affected Parties
- Logistics firms, gig workers, consumers
Sources
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