GST on shipping confuses everyone because it runs both directions — the courier charges you GST on freight (an input), and you charge the customer shipping (an output). Done right it's neutral; done wrong it's a leak.
The input side
Every courier invoice carries 18% GST on freight (GTA — goods transport agency). That GST is input tax credit against your GST liability — a ₹100 invoice costs you ₹84.75 net of credit. The rule: claim it. Reconcile carrier invoices against your GSTR-2B monthly.
The output side
Shipping you charge the customer is part of the composite supply — it takes the goods' GST rate, not the transport rate. Sell a 12% saree, charge ₹99 shipping → the shipping is also 12%. Mixed/composite supply rules apply; your CA confirms the specifics for your category.
'Free shipping' doesn't dodge anything
You still pay the courier GST-inclusive freight and still claim the input — the 'free' is a pricing decision, not a tax treatment. The input credit happens either way.
The reconciliation habit
Carrier invoices, aggregator invoices and marketplace shipping deductions all carry GST credits — the sellers losing money here are the ones not matching invoices to GSTR-2B. It's a quarterly hour that recovers real money.
Pakka Parcel automates exactly this — the pipeline from order to AWB without the manual steps.
See how →The playbook
Claim courier GST as input
18% GTA credit — it's on every freight invoice.
Charge shipping at the goods' rate
Composite supply — same rate as the product.
Match invoices to GSTR-2B
Quarterly reconciliation recovers missed credits.
Ask your CA about your edge cases
Composite vs mixed supply is category-specific.
