The GST Council's 57th meeting, held in New Delhi on October 8, 2026 under Union Finance Minister Nirmala Sitharaman, made several recommendations that touch small traders, online sellers, delivery platforms and service providers. They include a 5% Goods and Services Tax (GST) rate on delivery services supplied through e-commerce apps, a simpler registration route for small sellers on online marketplaces, and a waiver of late fee for small taxpayers who file a few days late.
These are recommendations. The Finance Ministry's release says they will take effect only through circulars, notifications and law amendments, so no rate or rule has changed yet.
Delivery through e-commerce apps
The Council recommended three linked changes for delivery of goods ordered online:
- Delivery services other than courier and postal, supplied through an e-commerce operator by a person who is not required to register under GST, will be brought under section 9(5) of the Central GST Act. Under that section the platform, not the individual delivery worker, pays the tax. The rate proposed is 5% without input tax credit (ITC).
- A 5% rate without ITC is also proposed for delivery services for goods supplied or ordered through an e-commerce operator.
- The existing exemption for goods transport agencies carrying goods for unregistered persons will not apply where the goods were supplied or ordered through an e-commerce operator.
The Council also recommended amending section 9(5) to make clear that the e-commerce operator is liable to pay tax on the notified services whatever business model it follows.
Small sellers on online marketplaces
A new rule 14B is proposed in the Central GST Rules for small suppliers who sell goods through e-commerce operators in States where they have no office or shop. Such a seller will be able to declare the operator's warehouse in that State as the principal place of business, and registration will be granted automatically by the system, subject to conditions. The route is for sellers who do not intend to pass on ITC of more than Rs 2.5 lakh a month.
The release said this will let small sellers expand to other States through e-commerce platforms without setting up a place of business in each State.
Relief for small taxpayers
- Late fee waiver: taxpayers with annual turnover up to Rs 5 crore in the previous financial year will not pay a late fee on a delayed monthly or quarterly return if it is filed by the end of the month in which it was due.
- Annual return, quarterly payment: the Council approved in principle a concept note for an optional Annual Return Quarterly Payment (ARQP) scheme. It is meant for taxpayers with turnover up to Rs 5 crore who sell only to unregistered buyers, that is, to consumers.
- Easier cancellation: an application to cancel a GST registration will be accepted automatically once all returns are filed and dues paid, in phases. The first phase covers taxpayers who have never passed on ITC above Rs 2.5 lakh in a month.
- Amendments: changes to registration details, other than the principal place of business, will be accepted automatically on the portal.
Electric cabs, hotels, restaurants and gyms
- Passenger transport and rental of motor vehicles with operators, when provided using an electric vehicle with the charging cost included in the price, will get an option to pay GST at 5% with restricted ITC.
- Restaurants and outdoor caterers, hotels with room value up to Rs 7,500 per unit per day, and gyms and fitness services will be allowed limited ITC on services bought from others in the same line of business. This facility is already available for passenger transport, tour operators and vehicle renting.
Goods - clarifications and changes
| Item | Recommendation |
|---|---|
| Toys | The toy entries in the GST rate schedules cover all toys under heading 9503, including dolls and puzzles, not only tricycles, scooters and pedal cars |
| Psyllium (isabgol) seeds | Nil GST, whether fresh, chilled, frozen or dried |
| Re-treaded tractor tyres | Rate to be aligned with that on new tractor tyres |
| Second-hand vehicle dealers (margin scheme) | ITC allowed on spares, repairs, rent, advertising and similar inputs; not on the vehicles bought |
| Plastic, electronic and tyre scrap, used cooking oil | Reverse charge when bought from unregistered suppliers; 2% tax deducted at source on sales between registered persons |
| Seaweed extract bio-stimulants | Classified as fertilisers under heading 3101 |
Services to be exempted
The Council recommended GST exemption for:
- storage or warehousing of seeds meant for sowing;
- curing of coffee by coffee curers for cultivators;
- seat-sharing helicopter passenger services to and from airports and helipads in the north-eastern States, Sikkim and Bagdogra in West Bengal;
- services of the Seamen's Provident Fund Organisation to persons covered by the Seamen's Provident Fund Act, 1966.
What happens next
The Central Board of Indirect Taxes and Customs and the States have to issue notifications for the rate changes and rule amendments, and each will carry its own start date. Changes to the Act need Parliament and the State legislatures. Until a notification is issued, the present rates and procedures continue.
Digital payments to small merchants are also changing this month. See our report on UPI volumes in September and the merchant charge due from October 15.
