CBIC clarifies 5% GST rate for e-commerce and delivery platforms

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that a uniform 5% GST rate will apply to various e-commerce and aggregator platforms, including cab services like Ola and Uber, and delivery platforms such as Swiggy, Zomato, Flipkart, and Amazon. This rate applies regardless of whether the platform connects customers to service providers or provides the delivery service directly.

In response to viral social media claims, the CBIC clarified that this is not a new tax imposition but rather a reduction in the existing tax rate. Following recommendations from the 57th GST Council meeting, the tax rate for these delivery services has been lowered from 18% to 5%.

Additional measures discussed by the GST Council include streamlining the tax system to make it more predictable, with potential rate changes occurring once a year starting April 1. The government is also working to simplify Input Tax Credit (ITC) and refund processes, including a recommendation to reduce the refund timeline from 15 days to 10 days. Furthermore, an Invoice Management System (IMS) will become mandatory in the next fiscal year to improve supply chain transparency and reduce tax liability notices.