📌 Introduction                                           

In the age of hyper-local services, crowdsourced delivery apps like Dunzo, Shadowfax, Swiggy Genie, and Wefast have revolutionized last-mile logistics in India. These platforms leverage independent delivery partners—often gig workers—to fulfill on-demand delivery services.

However, running such a platform is not just about matching a pickup to a drop location. It involves navigating a complex web of legal, tax, tech, labor, and financial compliances to avoid penalties and ensure business sustainability.

In this article, we’ll guide you through the major compliance requirements for launching and operating a crowdsourced delivery app in India.

🚀 What is a Crowdsourced Delivery App?

A crowdsourced delivery platform connects users needing deliveries with freelance or part-time delivery partners via a mobile or web application. It typically handles:

• 🛍️ Local parcel deliveries

• 🍽️ Food and grocery pickups

•  Document/courier drops

•  Logistics or supply runs

Such apps fall under on-demand gig economy models, and therefore, they must ensure compliance under various central and state laws.

✅ Major Business & Regulatory Compliances                                     

Let’s break down the required compliance areas into actionable components:

1️⃣ Company Registration 🏢

Before anything else, incorporate your business legally.

🔹 Options:

• Private Limited Company (Recommended for scalability)

• LLP or OPC (For small-scale operations)

• Startup India Registration (Optional, for benefits)

📄 Required Documents:

• PAN & Aadhaar of directors

• Office address proof

• MOA/AOA

• Digital Signatures (DSC)

• MCA approval

✅ Pro Tip: Register under Startup India to enjoy tax exemptions and faster patent processing.

2️⃣ GST Registration 

You must register under Goods & Services Tax (GST) since your service involves logistical transactions, whether B2C or B2B.

🛍️ Applicable GST Scenarios:

• Delivery charges invoiced to customers

• Commission charges from vendors or partners

• Platform service fees

📌 Key Points:

• File GSTR-1, GSTR-3B monthly/quarterly

• Issue GST-compliant invoices

• Collect GST where applicable (usually 18%)

💡 GST is applicable even if delivery riders are freelancers but earn through your platform.

3️⃣ Labour & Gig Worker Compliance 👷‍♂️                                                          

Gig workers fall under a new legal identity after the Code on Social Security, 2020.

📋 Your Obligations:

• Register on e-Shram portal (if employing gig workers)

• Comply with gig worker welfare fund once notified

• Optional insurance schemes like PM Suraksha Bima Yojana

• Proper contracts stating:

  • Delivery fee structure

  • No employer-employee relationship

  • TDS clauses, if applicable

⚠️ Tip: Treat delivery partners as independent contractors and issue clear terms & conditions.

4️⃣ ESIC / PF (If Employing Staff) 💼

If you have over 10 full-time employees (not gig workers), you must comply with:

• ESIC Act for medical insurance (mandatory for ₹21,000 salary and below)

• EPF contributions at 12% each by employer & employee

Gig workers are exempt unless formally employed, but your internal admin, tech, or sales team would fall under this.

5️⃣ Income Tax Compliance 💰

🔹 For the Business:

• PAN mandatory

• File Income Tax Return (ITR-6) for Pvt Ltd Company

• Maintain books of accounts under Section 44AA

• Get Tax Audit if turnover exceeds ₹1 crore (or ₹10 crore with digital compliance)

🔹 For Delivery Partners:

• If earnings exceed ₹2.5 lakh/year, partners must file ITR

• You may be required to deduct TDS under Section 194C (contractors) at 1%-2%

📣 Help your delivery partners with annual TDS statements (Form 16A).

6️⃣ Technology & Data Compliance 💻🔐

As a tech platform, you're governed by the Information Technology Act, 2000, and related guidelines.

🔒 Must Do:

• Have a Privacy Policy & Terms of Use

• Collect user consent before accessing location or personal data

• Comply with Digital Personal Data Protection Act, 2023

• Protect payment data under PCI-DSS guidelines (if integrating payment gateway)

• Encrypt user-driver communication data

✅ Appoint a Grievance Redressal Officer as per IT Rules (Intermediary Guidelines).

7️⃣ Local Transport & Licensing 🚚📃                                                

• All delivery vehicles have valid RC, insurance & PUC

• Commercial use of 2-wheelers requires yellow board registration

• Rider’s driving license and police verification

In some cities, registration with the local transport authority may be needed for commercial deliveries.

8️⃣ FSSAI License (If Handling Food) 🍔

If your app facilitates food pickup/delivery, obtain an FSSAI Aggregator License.

📄 Requirements:

• Application under FSSAI Central License

• List of partner restaurants with FSSAI license

• Food handling guidelines for delivery agents

9️⃣ Legal Contracts & IP Protection 📜🛡️

Drafting legal agreements protects your app’s interest and avoids future disputes.

Must-Have Documents:

• Terms & Conditions (for users and partners)

• Independent Contractor Agreements (for delivery partners)

• Vendor Agreements

• App Usage Policies

• NDA & IP Assignment (with tech developers)

💡 Consider registering trademarks for your brand name and logo.

🔟 Accounting & Record-Keeping                       

Maintain clean, audit-ready records for:

• 
  Rider payments

• Vendor settlements

• Platform commissions

• GST invoices

• App transaction logs

Use tools like Zoho Books, Tally, or cloud-based ERP for accuracy and traceability.

📲 Additional Optional Registrations

📊 Compliance Checklist Summary

🤔 FAQs

❓Do I need GST for a small delivery app with no revenue?

Yes, if you're charging delivery fees or offering services, GST is applicable regardless of revenue if your turnover crosses ₹20 lakh (or ₹10 lakh in some NE states).

❓Are gig workers considered employees?

No. They are independent contractors. However, the upcoming gig-worker laws may impose certain welfare obligations on platforms.

❓Can delivery agents work without commercial licenses?

Technically, personal vehicles used for commercial deliveries require NOC or commercial registration. However, enforcement varies across states.

📢 Final Thoughts

Launching a crowdsourced delivery app in India is exciting but comes with its share of responsibilities. A tech-first approach must be supported by regulatory compliance, especially around taxation, data privacy, gig economy regulations, and logistics safety.

Getting these right from the start ensures smoother scaling, better investor confidence, and strong public trust.

 Need Help? Contact TAXAJ Today!    

• ✅ Company Registration

• ✅ GST & Tax Filing

• ✅ Drafting Legal Contracts

• ✅ FSSAI, MSME & IP Registrations

• ✅ Startup Compliance Packages

📞 Book a consultation today!
🌐 www.taxaj.com

Created & Posted by Twinkle Jha

Operations Head at TAXAJ

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visit TAXAJ

Watch all the Informational Videos here: YouTube Channel                                                                                               

TAXAJ Corporate Services LLP

Address: 1/3, UGF, Sulahkul Vihar, Old Palam Road, Dwarka, New Delhi-110078

Contact: 8961228919 ; 8802812345 | E-Mail: connect@taxaj.com