Quick Commerce Charging GST on Handling Fee and Rain Fee: A Justified Practice or Overreach?

Introduction: From Groceries to GST-All in 10 Minutes

The booming quick commerce (q-commerce) sector, promising 10-minute grocery deliveries, is no longer just delivering onions and oat milk-it’s now delivering tax debates to our doorstep. A new wrinkle has emerged for consumers: GST being charged not just on the goods but also on handling fees and even rain fees.

This raises the legal and ethical question: Is it justified to levy GST on such ancillary charges, or is this another case of tax policy running faster than the delivery executive?

"If it takes 10 minutes to deliver groceries, but 10 days to understand the invoice, congratulations-you’ve just experienced GST in real-time."

Let’s unpack this in legal, practical, and even global terms.

Understanding the Fees: Handling & Rain Fee in Quick Commerce

Handling Fee is a charge for services such as packaging, segregating, or assembling your order, typically applicable to low-value or urgent deliveries.

Rain Fee is levied during inclement weather, supposedly to compensate delivery partners and cover operational inefficiencies.

Both these charges are service-oriented-raising the issue of whether GST should apply and at what rate.

Legal Lens: What Does the GST Law Say?

📜 Section 9 of the CGST Act, 2017

GST is leviable on "supply of goods or services or both." The term supply is defined broadly under Section 7 to include all forms of supply for a consideration in the course of business.

Thus, if the handling or rain fee is part of a composite supply, it attracts the same GST rate as the main item (i.e., groceries). But if treated as an independent or ancillary supply, the treatment may differ.

📃 CBIC Clarification (FAQs & Circulars)

In previous circulars (e.g., Circular No. 32/06/2018-GST), the CBIC clarified that packing, handling, delivery or similar charges are part of the price of the goods, and GST should apply on the total consideration, including such charges.

Hence, quick commerce players are technically within legal rights to charge GST on handling fees.

☔ What about "Rain Fee"?

This is murkier. There’s no explicit classification for rain fees under existing GST Tariff or Circulars. However, if it is:

• Consideration for tolerating a condition (say, delivery delays),

• Consideration for service performed under hardship (weather surcharge),

...then arguably, it falls under ‘supply of service’, taxable at 18%, unless exempted.

" It rains, you pay a fee. It doesn’t rain, you still pay GST. The only thing that never showers in India is tax exemption."

Composite vs. Mixed Supply Debate

☑ Composite Supply (Sec. 2(30))

If goods and services (e.g., groceries + handling) are naturally bundled, then the principal supply governs the GST rate.

• Example: Groceries (5%) + handling fee → Entire supply taxed @ 5%.

❌ Mixed Supply (Sec. 2(74))

If the supplies are not naturally bundled, and each is independent (like groceries + optional rain protection), the highest GST rate applies.

Thus, companies might prefer bifurcating charges to avoid such confusion-but in practice, billing systems often lump it all together.

Case Study: Swiggy Instamart, Zepto & Blinkit Invoices

This bifurcation indicates that these platforms treat "handling" and "rain" as separate services, not part of the grocery supply

Whether this segregation holds under scrutiny depends on how these charges are communicated and contracted with users.

Consumer Protection Angle

From a consumer standpoint, these fees seem like hidden charges. The GST-inclusive invoice inflates the burden, especially on low-value items.

Section 4 of the Consumer Protection Act, 2019 mandates fair trade practices. If rain fees or handling fees are not pre-disclosed or arbitrarily levied, it could amount to:

• Unfair trade practice

• Deficiency in service

A proactive disclaimer and T&C transparency are therefore essential for these players.

Global Practices: How Do Other Countries Treat It?

India, therefore, is not unusual in taxing these services. But "rain fee" is a uniquely Indian innovation-born out of monsoon, traffic jams, and entrepreneurial jugaad

" First, we had climate change. Now we have climate charges."

Ethical and Policy Viewpoint

The argument against such GST is simple: should weather hardship or convenience packaging become a taxable opportunity?

• Pro Tax Argument: These are optional or value-added services, and GST ensures neutrality in treatment

• Anti Tax Argument: Taxing "rain surcharge" seems predatory when basic commodities are being bought

A more balanced policy approach would be:

• Threshold-based exemption: Don’t levy GST on rain or handling fee for orders below Rs. 100.

• Uniform rate clarity: CBIC should notify a specific treatment or composite bundling guidance for q-commerce

Conclusion: The Price of Speed is Taxed Too

Quick commerce has redefined convenience, but in the process, has also redefined complexity in taxation. The GST on handling and rain fees is legally defensible, commercially predictable, but ethically debatable.

What remains clear is this: as delivery gets faster, tax scrutiny will only get sharper.

So, the next time your paneer is at the door in 8 minutes, take 2 minutes to read the invoice-you might just find a raincloud in the fine print.

🔖 Summary

• GST is applicable on handling and rain fee under "supply of service".

• Legally justified under Section 9 & CBIC circulars if not part of composite supply.

• Ethical concerns arise if these charges are arbitrary or undisclosed.

• Rain fee is a grey area needing regulatory clarification.

• Global trends support GST on such services, but India stands out with "rain fee".

• Better disclosure and policy clarification is the way forward.

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.