Nasscom requests deferment of new GST rules for e-commerce deliveries

Nasscom, an industry body representing India's technology sector, has submitted a formal request to the Finance Ministry seeking a deferment of new Goods and Services Tax (GST) rules for e-commerce deliveries. The regulations, announced in late October, were scheduled to take effect on November 1, leaving companies with insufficient time to update their compliance systems.

The updated framework sets a 5% GST rate for specific delivery services but eliminates input tax credit (ITC) eligibility. According to Nasscom, this shift necessitates significant changes to enterprise resource planning (ERP) systems, accounting practices, and tax calculation engines. The organization argues that a transition period is required to test and deploy these adjustments across the logistics ecosystem without disrupting ongoing operations.

In its submission, Nasscom called for formal industry consultations to address the operational challenges posed by the rules. The body highlighted that the removal of ITC means that a headline reduction in tax rates may not necessarily translate into lower operating costs or reduced delivery prices for consumers, as the final impact varies significantly based on individual business models.

As of now, the Finance Ministry has not provided a definitive response regarding a potential extension of the implementation deadline.