GST Treatment multiple delivery services

This query is : Resolved

Balakrishna Pillai Harikumar (Querist)
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05 August 2025 We are delivering the following items to customers from different restaurants and shops on the basis of the orders received through an online platform.
1. Restaurant food
2. Confectionaries from bakeries
3. Grocery
4. Fish and meat
Since the firm is started its business this financial year and before filing the first GST return, I would like to have clarification in the following matters. We are acting as an intermediary only to collect and deliver the ordered items given by the customers. The selection of supplier and items are completely limited to the choice of the customer.
1. The entire amount including delivery charges are collected by us and the amount due to the supplier will be given back to them.
2. We are eligible for a profit margin from the amount due to the supplier.
3. The entire delivery charges are retained by us.
Kindly advise the tax treatment on GST for the above model of business.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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12 August 2025 Got it! You’re running an online platform acting as an intermediary between customers and various suppliers (restaurants, bakeries, grocery, fish/meat shops), handling order collection and delivery. Let me explain the GST treatment for your scenario step-by-step:
Your Business Model Recap:
You collect the full amount from customers (item price + delivery charges).
You pay the supplier their share (item price minus your margin).
You keep the profit margin and full delivery charges.
You act as an intermediary service provider.
GST Treatment Clarification:
1. Are You an Intermediary or Principal?
Intermediary (as defined in GST law) means a person who arranges or facilitates supply but does not supply goods or services on their own account.
In your case, since you collect full amount and retain delivery charges and margin, you are likely the principal supplier of:
The goods (food, groceries, etc.)
Delivery services
2. Tax on Supply of Goods
Since the customer places the order through your platform and you supply goods to the customer, you are treated as the supplier of goods.
You must issue tax invoices to the customers for goods + delivery charges.
You need to pay GST on the full amount collected (goods + delivery charges).
You should also pay GST on the supplier’s margin as your supply is considered your sale.
3. Tax on Delivery Charges
The delivery charges are part of your supply of services.
GST is applicable on the delivery charges you collect and retain.
You must charge GST on the full delivery charge collected.
4. Tax Invoice & Input Tax Credit
You should issue tax invoices to customers showing goods + delivery charges separately or combined.
You will raise tax invoices to suppliers only for your margin (if you pay suppliers after deducting margin).
The suppliers will issue tax invoices to you for the supply of goods.
You can claim input tax credit on the GST paid to suppliers on goods.
5. Alternative (If You Are Only an Intermediary)
If you act purely as an intermediary, charging only a commission, then:
Your service is intermediation service.
GST is payable on your commission.
Suppliers supply goods directly to customers and invoice customers.
You don’t invoice customers for goods, only for your commission and delivery service.
But from your description, you collect the entire amount and pay suppliers, so you are principal supplier, not intermediary.
Summary Table:
Aspect Your Scenario (Principal Supplier)
Supply of Goods You supply goods to customers; liable for GST on full value
Delivery Charges You supply delivery service; GST applicable on delivery charges
Supplier Payment You pay suppliers after deducting your margin
Tax Invoice You issue invoice to customer for goods + delivery charges
ITC You can claim ITC on GST paid to suppliers
Important Notes:
Make sure GST registration and invoicing comply with this model.
Maintain proper records of supplier invoices, payments, and margins.
Separate accounting of delivery charges is advisable.

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