Quick Commerce & Local Deliveries: Place-of-Supply, Invoices, and SGST vs IGST
The rapid growth of quick commerce and local delivery services has brought significant changes to GST compliance requirements in 2025. With new regulations effective from September 22, 2025, businesses operating in the local delivery space must navigate complex place-of-supply rules, invoicing requirements, and the critical distinction between SGST and IGST applications. This comprehensive guide breaks down everything you need to know about GST compliance for quick commerce operations.
The Revolution of Quick Commerce: A New Tax Landscape
Quick commerce has fundamentally transformed how consumers access goods and services, with platforms delivering everything from groceries to electronics within hours. However, this convenience comes with evolving tax obligations that businesses must understand to remain compliant. The recent amendments to IGST rules, effective September 22, 2025, have created a new framework for local delivery services that directly impacts how businesses calculate, collect, and remit GST.
The Central Board of Indirect Taxes and Customs (CBIC) has clarified that local delivery services will now attract 18% GST, marking a significant shift in the tax treatment of last-mile delivery operations CNBC TV18. This change affects millions of transactions daily and requires businesses to reassess their compliance strategies.
Understanding Place-of-Supply in Quick Commerce
The concept of place-of-supply is crucial for determining whether a transaction falls under intra-state (SGST + CGST) or inter-state (IGST) tax jurisdiction. For quick commerce operations, the place-of-supply is determined by where goods are delivered, not where the order is placed or processed.
Key Scenarios in Quick Commerce:
1. Same State Delivery: When both the supplier and recipient are in the same state, the transaction attracts SGST (State GST) plus CGST (Central GST), each typically at 9% for an 18% total tax rate.
2. Inter-State Delivery: When goods cross state boundaries, IGST (Integrated GST) applies at the full 18% rate, which is later distributed between the origin and destination states.
3. Union Territory Considerations: Deliveries involving Union Territories have specific rules that may attract UTGST (Union Territory GST) instead of SGST.
For businesses managing multiple state operations, this complexity requires robust systems to automatically determine the correct tax application. This is where comprehensive eCommerce account management services become invaluable, ensuring accurate tax calculations across all jurisdictions.
The New IGST Rules: What Changed in September 2025
The government's notification No. 17/2025-Integrated Tax (Rate) has introduced significant changes to how local delivery services are taxed TaxGuru. The amendment clarifies that:
- Direct delivery by registered persons: 18% GST is payable by the supplier
- Delivery via e-commerce operators by unregistered persons: 18% GST must be paid by the e-commerce operator under Section 9(5)
- Delivery via e-commerce operators by registered persons: 18% GST remains payable by the registered delivery partner
These changes have profound implications for quick commerce platforms, especially those working with a mix of registered and unregistered delivery partners. The compliance burden now varies significantly based on the registration status of service providers.
Invoicing Requirements for Quick Commerce Operations
Proper invoicing is the cornerstone of GST compliance in quick commerce. The recent changes have made accurate invoice generation more critical than ever. Here are the essential invoicing requirements:
Mandatory Invoice Elements:
- GSTIN of supplier and recipient
- Place of supply details
- HSN/SAC codes for goods and services
- Tax breakdown (SGST/CGST or IGST)
- Delivery charges separately mentioned
- Date and time of supply
Time of Supply Considerations:
For quick commerce, the time of supply is particularly important as it determines the applicable tax rates and compliance requirements. The invoice must be issued:
- Before or at the time of delivery for goods
- Within 30 days of service completion for delivery services
Businesses often struggle with generating compliant invoices at scale. This challenge is where automated solutions become essential. Tools like the Bulk Listing platform can help businesses generate compliant content across multiple marketplaces, while comprehensive eCommerce management services ensure ongoing compliance across all operations.
SGST vs IGST: Making the Right Choice
The distinction between SGST and IGST is fundamental to quick commerce operations. Understanding when each applies can save businesses from costly compliance errors.
When SGST + CGST Applies:
- Supplier and buyer in the same state
- Local delivery within state boundaries
- B2B transactions within the state
- B2C sales to local customers
When IGST Applies:
- Inter-state transactions
- Deliveries crossing state boundaries
- Export of goods or services
- Supply to Special Economic Zones (SEZ)
Impact on Cash Flow:
The choice between SGST/CGST and IGST significantly impacts cash flow. IGST paid on purchases can be used to set off IGST liability on sales but cannot be used against SGST/CGST liabilities without following specific procedures. This requires careful planning and often benefits from performance marketing strategies that optimize operations across state boundaries.
Technology Solutions for Compliance Management
Managing GST compliance across multiple states and transaction types requires sophisticated technology solutions. Modern quick commerce businesses need systems that can:
- Automatically determine place-of-supply
- Calculate appropriate tax rates
- Generate compliant invoices
- Track inventory across locations
- Manage input tax credits effectively
Businesses can leverage comprehensive tools available through platforms like ToolSynergy, which offers specialized GST calculators and compliance tools designed for e-commerce operations. The E-commerce GST Calculator specifically helps businesses determine accurate tax amounts with HSN codes for major marketplaces.
Best Practices for Quick Commerce GST Compliance
1. Implement Robust Technology Infrastructure
Invest in systems that can handle complex place-of-supply determinations and automatic tax calculations. Consider using project management tools to track compliance activities across multiple locations and teams.
2. Regular Training and Updates
Keep your team updated on changing regulations. The September 2025 amendments are just the latest in ongoing GST evolution.
3. Maintain Detailed Records
Document all transactions with proper justification for place-of-supply determinations and tax applications.
4. Regular Compliance Audits
Conduct periodic reviews to ensure ongoing compliance with evolving regulations.
5. Professional Support
Consider partnering with specialists who understand the intricacies of quick commerce GST compliance.
The Future of Quick Commerce Taxation
As quick commerce continues to evolve, we can expect further refinements to GST regulations. The government's focus on bringing more transparency and accountability to the delivery economy suggests that compliance requirements will become more sophisticated.
Businesses that invest in robust compliance infrastructure today will be better positioned for future regulatory changes. This includes implementing comprehensive website development and maintenance services that can adapt to changing compliance requirements and integrate with various tax platforms.
Leveraging Social Media for Compliance Awareness
In today's digital age, staying informed about regulatory changes requires active monitoring across multiple channels. Social media management services can help businesses stay updated on regulatory changes while building a community of informed stakeholders who can share insights and best practices.
