Courier services attract 18% GST under SAC code 996812: 9% CGST + 9% SGST within a state, or 18% IGST between states. Agencies can usually claim input tax credit on the GST their carriers charge them, so they effectively pay tax on their margin.
This guide is general information, correct to our knowledge on the date above. It is not tax advice: GST rates and rules change, so confirm your position with your CA.
Rate and SAC code
| Item | Courier services |
|---|---|
| SAC code | 996812 |
| GST rate | 18% |
| Within the same state | 9% CGST + 9% SGST |
| Between states | 18% IGST |
Goods transport agency (GTA) services by road, such as truck transport with a lorry receipt, fall under different rates and reverse-charge rules. Don't apply the courier rate to them without checking.
Place of supply
For transporting goods, including by courier, the place of supply decides whether you charge IGST or CGST + SGST:
- Client is GST-registered: the client's registered location.
- Client is not registered: the place where the goods are handed over for transport.
What's taxable
GST applies to the whole charge for the service, not just the base freight. Fuel surcharge, COD handling charges and other add-ons billed with the shipment are normally part of the taxable value.
Input tax credit (ITC)
Your carriers charge you GST on their bills. If you're registered and the carrier shows your GSTIN on its invoice, you can usually claim that as input tax credit against the GST you charge clients. Business clients likewise want a proper GST invoice from you so they can claim their credit, which is why most agencies register early.
Registration
GST registration is mandatory once your aggregate turnover crosses ₹20 lakh for services (₹10 lakh in special-category states). Many agencies register voluntarily from day one because business clients expect GST invoices.
What your invoice must show
- Your name, address and GSTIN
- Invoice number and date
- Client's name, address and GSTIN (if registered)
- SAC code 996812 and a description of the service
- Taxable value, GST rate, and the CGST/SGST or IGST amount
- Place of supply
Businesses above the e-invoicing turnover limit (currently ₹5 crore) must also generate e-invoices through the invoice registration portal.
E-way bills for courier shipments
An e-way bill is generally needed when a consignment's value exceeds ₹50,000. When goods are sent through a courier agency, the rules allow the agency to fill in the e-way bill details on the consignor's authorisation.
How Hyper Route helps
Hyper Route generates invoices from shipments already booked and handles GST for you, so nothing is billed twice and nothing is missed. See courier billing with GST.