Flipkart’s step to move the High Court comes at a time when transport operators and SME groups have taken steps to appeal to various State-level commercial tax authorities to deny the exemption to Flipkart, taking a cue from the WBAAAR ruling. | Photo Credit: Dado Ruvic

E-commerce major Flipkart India has moved the Kolkata High Court with a plea to grant the company GST exemption on delivery charges by treating its services as those provided by a goods transport agency (GTA). This petition has been filed after the West Bengal Appellate Authority for Advance Ruling (WBAAAR) rejected the company’s attempt to claim GST exemption by classifying itself as a GTA, setting aside in May a ruling by the authority allowing the exemption to Flipkart.

A writ petition by Flipkart India, as seen by businessline, prayed for a declaration that “the services supplied by the petitioner described herein qualify as goods transport agency services”. It also sought a declaration that GST exemption be granted to Flipkart under Entry 21A of Notification No 12/2017-Central Tax (rate) dated June 28, 2017. 

A GTA is any business that transports goods by road and issues a consignment note - the document showing that the transporter has taken responsibility for the goods until delivery. This particular provision exempts GTA services from GST when provided to an unregistered person, and is meant to offer relief to unregistered individual consumers from paying GST on road freight and transport delivery.

Flipkart’s step to move the High Court comes at a time when transport operators and SME groups have taken steps to appeal to various State-level commercial tax authorities to deny the exemption to Flipkart, taking a cue from the WBAAAR ruling.

Seeking scrutiny

K Narasimhan, Convener of the Forum For Progressive Gig Workers in India, told businessline that they have made representations to Tamil Nadu’s commercial tax authorities to prevent e-commerce companies like Flipkart and others from seeking GTA exemption and investigate the issue. Tamil Nadu’s tax revenue has been slow this year, and addressing this issue could bring back close to ₹300-350 crore of GST revenue for the State, he said. 

State authorities in Rajasthan and Punjab are also said to have taken note of this issue. As per tax experts businessline spoke to, the WBAAAR examined Flipkart’s business model and ruled that the e-commerce major’s integrated logistics operations do not qualify as GTA services. The WBAAAR noted that issue of a consignment note is not sufficient, and Flipkart is not just a courier but runs end-to-end process, where goods go through source hubs, sorting centres, transshipment points and last-mile delivery agents. Such operations, thus, attract 18 per cent GST on delivery charges, it ruled.

According to those in the know, the new invoicing structure, which considers the seller marketplace fees as goods transport agency charges, will lead to revenue and margin cuts for sellers, and the impact could be around ₹2,600 crore across small businesses and FPOs. 

Industry sources note that this issue needs to reach a logical conclusion as early as possible. 

Wider implications

According to an executive with the logistics industry, India is building a globally competitive manufacturing and export economy, and is negotiating trade agreements that will open new markets. All that ambition travels in the end on the same road — the integrated digital logistics network that moves goods from producer to buyer, across every geography and every border. “That road must stay free,” the executive emphasised.

“The recent ruling raises an important question for policymakers and tax authorities: whether the GST treatment of modern e-commerce logistics services is fully aligned with the nature of the services being delivered. As India’s digital economy continues to expand, regulatory clarity and uniform enforcement become critical. Any inconsistency in tax treatment not only has implications for government revenues, but also for the millions of MSMEs that compete within the same ecosystem and are expected to comply with the law in both letter and spirit,” said Vinod Kumar, President, India SME Forum.

Another executive added: “For me, the most interesting lens is whether integrated digital logistics should increasingly be viewed as part of India’s commerce infrastructure rather than simply another commercial service. That debate is likely to become more relevant as digital commerce, ONDC, cross-border trade and MSME exports continue to grow.”

Published on June 15, 2026