Multimodal transport after September 2025
Multimodal transport of goods within India was moved from 12% to 5% where no leg of transport is by air, with credit restricted to input services of goods transportation, and to 18% with credit in other cases. A logistics company qualifies only when it acts as a multimodal transport operator under a single contract covering at least two modes and issues a multimodal transport document. If it simply books rail and road legs separately and bills each, the legs are taxed separately.
GTA freight inside a 3PL bill
When the logistics company issues consignment notes for road movements, it is a GTA for those lines, so reverse charge or the GTA forward charge option applies to them, while warehousing and handling lines carry 18% under forward charge. One invoice can show both, but the reverse charge lines must be marked clearly, or a separate invoice should be issued for them so that the client's reverse charge reporting is easy.
Composite or mixed supply
A 3PL contract for warehousing, picking, packing and dispatch with one monthly fee may be a composite supply, taxed at the rate of the principal supply. If the contract prices each service separately, each is a separate supply at its own rate. Since freight and warehousing can be at different rates, the contract structure decides the tax, so align the contract with your invoices.
E-way bills across modes
When goods move across modes, the e-way bill must be updated for each conveyance, including rail receipt or other transport document numbers. Logistics companies handling multiple modes should assign responsibility for Part B updates in their SOP and capture each update in the shipment record, because a missed update at a transhipment point is a common cause of detention.
Service level credits and penalties
3PL contracts commonly include penalties for late delivery, damage or inventory shrinkage. A penalty deducted by the client from the logistics company's invoice reduces the consideration if it is agreed in the contract and linked to the invoice, and is best handled through a credit note under section 34. If the client raises its own debit note as a separate charge, tax treatment may differ, so the contract should specify how service credits work and the invoicing team should follow it.
Inter-state branches and place of supply
Large logistics companies operate warehouses in many states, each with its own GSTIN. The invoice for warehousing must be issued from the GSTIN of the state where the warehouse sits, while freight billing depends on the place of supply rules for transport of goods. Centralised billing teams must pick the right GSTIN for each line. Using the head office GSTIN for a warehouse in another state is a frequent error with costly corrections.