Logistics major Delhivery said the recent increase in Goods and Services Tax (GST) rates has had little to no material impact on its operations or profitability in the September quarter, even as the change briefly affected shipment timing and working capital.
The company, on November 5, clarified that the transition to the new 18 percent rate was implemented smoothly across its client base and fleet partners, with no meaningful disruption to business volumes or vendor relationships.
How much of Delhivery's business was affected by the GST change?
In a shareholder letter, while announcing the company's Q2 FY26 results, Delhivery said that over 86 percent of its Q1 FY26 invoicing was already billed at 18 percent GST, while another 6 percent came under nil-GST or reverse charge mechanisms that were unaffected by the amendment.
Only about 8 percent of billing, previously taxed at 12 percent, needed to migrate to the 18 percent rate after the government’s July notification.
"We have transferred this billing to the 18 percent GST rate without any meaningful loss of business," the company said, adding that most fleet vendors have also transitioned to the higher rate.
Did the GST hike disrupt vendor contracts or operations?
Delhivery said its inter-city and intra-city fleet vendors, who earlier billed at 12 percent GST, are now billing at 18 percent, with no significant attrition. The company also noted that fleet purchases, which were earlier taxed at 28 percent, now attract 18 percent GST, partially offsetting the overall tax burden.
"The GST amendment does not pose any material adverse risk to our P&L or competitive position," Delhivery said. "There would be some working capital impact, which will become clearer with time, but we do not expect it to be meaningful given our scale and capital position."
Did the rate change affect shipment volumes?
Delhivery said the GST rate change caused a temporary shift in e-commerce and freight volumes toward the last week of September, as clients adjusted to new billing norms. The shift helped the company record some of its highest-ever monthly dispatches in September and October.
During the quarter ended September 30, the logistics major reported total income of Rs 2,652 crore, up 17 percent year-on-year, and a net loss of Rs 51 crore, largely due to one-time costs related to the integration of Ecom Express.
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