Logistics firms to see margin hit after 18% tax on delivery

With fuel kept outside GST and ineligible for input tax credit, logistics firms can't offset expenses

- Sakshi Sadashiv

The government's decision to impose an 18% goods and services tax (GST) on delivery services is set to squeeze margins across India's logistics ecosystem—from IPO-bound Porter and Uber Delivery to unicorn Rapido and heavyweight Delhivery. With fuel—their biggest cost—kept outside GST and ineligible for input tax credit, logistics firms can't offset expenses—forcing them to pass the burden onto small businesses and consumers, while also thinning delivery workers' earnings.