Advance Ruling Authority Exempts Flipkart’s GTA Services for Unregistered Customers from GST
In a landmark decision, the Authority for Advance Rulings (AAR) of West Bengal has classified the transportation services proposed by Flipkart India Private Limited as Goods Transport Agency (GTA) services under the Goods and Services Tax (GST) framework. This ruling, dated December 9, 2025, comes as Flipkart plans to implement a new business model offering road transportation services for goods purchased through various e-commerce platforms.
The ruling clarifies that Flipkart's service model qualifies as GTA services because it involves the exclusive transportation of goods by road and the issuance of consignment notes. These consignment notes transfer the lien on goods to the transporter and hold them responsible until safe delivery to the consignee. The AAR emphasized that the issuance of consignment notes is a mandatory requirement for classification as GTA services, aligning with previous judicial precedents under the erstwhile Service Tax regime.
The Authority further ruled that services provided by Flipkart to unregistered customers through e-commerce portals are eligible for exemption under Serial No. 21A of Notification No. 12/2017 - Central Tax (Rate) dated June 28, 2017. This exemption is applicable as long as the recipient is an unregistered individual and not part of the excluded categories mentioned in the notification.
Flipkart’s new model involves picking up goods from a designated Source Mother Hub, delivering them to end-customers, and issuing a single consignment note for the transportation journey. The service will include possible transit points and utilize various road transportation modes, such as trucks, vans, and two-wheelers.
The ruling also addressed the potential overlap with courier services, asserting that Flipkart's transportation services, being entirely road-based and involving consignment notes, do not fall under the category of courier agency services. The distinction was made based on the nature of transport and the issuance of consignment notes, as courier agencies typically do not issue consignment notes and may use multi-modal transportation methods.
This decision is set to impact the operational strategy of Flipkart, allowing them to offer their transportation services without the burden of GST for unregistered customers, thus potentially reducing costs for consumers purchasing through e-commerce platforms. It also provides a clear legal framework for other e-commerce operators planning similar service models.
The ruling underscores the importance of consignment notes in the classification of transport services under GST, reinforcing the necessity for transporters to issue these documents to qualify as GTA. The decision is expected to streamline the compliance processes for e-commerce logistics providers and set a precedent for future rulings in the sector.
Bottom Line:
Goods Transport Agency (GTA) services under GST - Issuance of consignment note is a mandatory requirement to classify transportation services as GTA. Services provided to unregistered customers through an e-commerce operator's portal are eligible for exemption under specific provisions of GST law.
Statutory provision(s): Section 97 of the GST Act, Notification No. 12/2017 - Central Tax (Rate), Section 2(93) of the CGST Act
Flipkart India Private Limited, (AAR)(West Bengal) : Law Finder Doc Id # 2824501
