GST on Courier Services / What is Courier
Services / GST Rate on Courier Services / SAC code of Courier Services
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.
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