The industry body has sought adequate transition period for marketplaces to overhaul their technology, accounting and compliance systems in line with the new regime
It is pertinent to note that the GST rules were notified on October 27 and are scheduled to take effect on November 1, leaving companies only a few days to comply
The new norms introduce a 5% GST rate without ITC for specified delivery services. The rules also revise the scope of services for which ecommerce operators must discharge tax liability
Industry body Nasscom has urged the finance ministry to defer the implementation of the revised GST rules for ecommerce delivery services to January 2027.
In a representation submitted to the ministry on October 28, the industry body sought an adequate transition period for marketplaces to overhaul their technology, accounting and compliance systems in line with the new regime.
It also urged the ministry to conduct consultations with ecommerce operators, logistics providers and other businesses impacted by the new norms.
It is pertinent to note that the GST rules were notified on October 27 and are scheduled to take effect on November 1, leaving companies only a few days to comply. The changes follow recommendations made by the 57th GST Council on October 8.
The new norms introduce a 5% GST rate without input tax credit (ITC) for specified delivery services. The rules also revised the scope of services for which ecommerce operators must discharge tax liability.
“While these changes aim to bring greater consistency to GST treatment, their implementation would require significant adjustments across the ecommerce and logistics ecosystem,” Nasscom said.
Citing its rationale, Nasscom said that implementing the new framework would require changes to enterprise resource planning (ERP) configurations, invoicing, tax calculations, input tax credit treatment and GST compliance processes. The industry body also noted that marketplaces would need to examine the notified provisions, assess how they apply to different operating models and test their systems before deployment.
Based on industry assessments, Nasscom requested a January 1 implementation date to complete the necessary adjustments.
The association also called for industry-wide consultation to clarify requirements and address implementation challenges, arguing that coordinated preparation would help prevent avoidable disruptions.
At the heart of the development is the revised tax framework, which reduces GST on specified delivery services from 18% to 5% but also removes the eligibility for ITC. This means impacted service providers cannot offset eligible GST paid on business inputs against their output tax liability.
As such, a lower headline rate does not necessarily translate into an equivalent reduction in operating costs or customer delivery charges. The impact will depend on each business’s structure and input tax position.
The notified wording also replaces “local delivery” with “delivery services, other than postal and courier services”, broadening the description beyond local deliveries.
With this, the immediate question for ecommerce platforms is whether the government will extend the deadline and give businesses more time to align their systems with the new regime. Will the finance ministry give in? Only time will tell.
Source: Inc42
