![]()
What Are Courier Services?
Courier services handle the
collection, transportation, and delivery of documents, packages, and parcels
from one place to another. These services can be provided within the country or
internationally. They are known for being fast, reliable, and offering
door-to-door service. Most courier companies also offer tracking, so customers
can see where their package is at any time.
GST on Courier Services
According to the GST rules, services
related to transporting goods by road are generally exempt from GST. However,
this exemption does not apply to courier services. Specifically, as per S. No.
18 of Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017, services
provided by a goods transport agency or a courier agency are taxable under GST.
This means, services by way of transport of goods by
road are exempt from levy of tax. However, services provided by goods transport
agency as well as a courier agency are taxable. In other words, mere
transportation of goods by road, unless it is a service rendered by a goods
transport agency or a courier agency, is exempt from GST.
Classification of Courier Services
Courier services are classified
under Heading 9968 of the GST classification system. This category includes all
types of postal and courier services. As per ANNEXURE
appended to Notification No. 11/2017 – Central Tax(Rate), dated 28.06.2017, the
scheme of classification in respect of postal and courier services is as under:
|
S. No.
|
Chapter, Section, Heading or Group
|
Service Code (Tariff)
|
Service Description
|
|
(1)
|
(2)
|
(3)
|
(4)
|
|
1
|
Chapter 99
|
|
All Services
|
|
159
|
Heading 9968
|
|
Postal and courier services
|
|
160
|
Group 99681
|
|
Postal and courier services
|
|
161
|
|
996811
|
Postal services including post office
counter services , mail box, rental services
|
|
162
|
|
996812
|
Courier Services
|
|
163
|
|
996813
|
Local Delivery Services
|
|
164
|
|
996819
|
Other Delivery Services nowhere else
clssified
|
GST Rate on Courier Services
The GST rate for courier services is
9% under the Central Goods and Services Tax (CGST), with a similar rate applied
for State GST (SGST) or Union Territory GST (UTGST), making the total GST rate
18%.
Time of Supply for Courier Services
Under GST, the liability to pay tax
arises at the time of supply of goods or services. For courier services, this
is determined by the earliest of the following:
- The date the invoice is issued (if issued within the
prescribed time),
- The date of receipt of payment, or
- The date the service is provided (if no invoice is
issued on time).
Place of Supply for Courier Services
For GST purposes, the place of
supply determines whether CGST or IGST is applicable. The
provisions relating to determination of place of supply of services are
enshrined under section 12 of the Integrated Goods and Services Tax Act, 2017.
As per subsection (8) of section 12 of the IGST Act, the place of supply of
services by way of transportation of goods shall be as under:
|
S. No.
|
Services provided to
|
Place of Supply shall be
|
|
(i)
|
A registered person
|
The location of such person
|
|
(ii)
|
An unregistered person
|
(i)
Location of the recipient where the
address on record exists; and
(ii)
The location of the supplier of services
in other cases
|
Input Tax Credit for Courier
Services
Businesses providing courier
services can claim input tax credit on the GST paid for goods or services used
in their business. Similarly, businesses that use courier services can claim
input tax credit on the GST paid for these services, as courier services are
not restricted from input tax credit eligibility.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
Click here
