Introduction
The courier bill is an important document that all businesses will come into contact with at some point in their operations, whether you are running an eCommerce shop, store-front, or warehouse, or sending out pieces on a sporadic basis. Many logistics companies such as Dispatch Solutions, Delhivery, Blue Dart, XpressBees, DTDC, Shadowfax, Ecom Express and many others, have created courier bills for their customers.
While the courier bill serves an obvious purpose of being a bill for the shipping charges, it serves a much larger purpose. A courier bill contains information that is necessary for the seller and buyer to complete billing and accounting, and for both parties to reconcile the weight of goods shipped, the calculations involved in determining shipping fees, etc.
There are instances where there is confusion between the seller and the customer regarding the charges that have been charged to the customer, how the shipping charges were computed, the discrepancies in weight charges when disputes arise between the seller and the customer, the fluctuating amounts between the courier bills on different days, how to resolve issues related to whether the courier bill was correct.
This comprehensive guide explains everything about courier bills, including
- What is a courier bill?
- Components of a standard courier bill
- How courier charges are calculated
- Volumetric weight vs actual weight
- Common billing issues
- How to avoid weight disputes
- How GST is applied to courier bills
- Courier bill formats with examples
- Automated billing through courier aggregators
- Tips for businesses to reduce courier billing costs
- Frequently asked questions
Let’s dive deep into the world of courier billing.
What Is a Courier Bill?
A courier bill is an invoice produced by a delivery service company that informs customers about the price of sending a package through their service. The way to send this invoice will depend on the type of service offered by the delivery service company. It includes information about the weight, dimensions, distance, GST, service type, delivery costs, COD charge, and additional fee options.
The use of a courier bill has several purposes, including:
- Accounting and Financial Records
- GST Input Credit
- Verification of Shipments
- Tracking and Handling Claim Issues
- Payment Reconciliation
- Estimating a Business Expense
For eCommerce sellers and large shipment senders, the courier bill is issued either
- Daily
- Weekly
- Bi-weekly
- Monthly
This depends on the contract between the courier partner and the business.
Importance of a Courier Bill in Logistics
A courier bill is an important document issued to the sender and courier service. Below, are some examples of the significance of a courier bill:
A record of the shipping invoice
The courier bill includes the amount that was charged to a business for freight.
GST Compliance
This will help validate that the cost of shipping includes GST, and therefore can be claimed by the business as an ITC (Input Tax Credit).
Accurate Shipment Information
The following information appears on each bill: Air Bill Numbers (AWB), Delivery Status, Pickup Date, Weight, and Charges; this combination enables an accurate billing process.
Reconciliation of Cash on Delivery (COD) Orders
For COD shipments, the Courier Bill assists in matching the cash collected to its outstanding receivables.
Business Cost Analysis
E-commerce retailers can identify
- High Cost Zones
- High Rates of Return (RTO)
- Weight Differences
This allows for better business operational efficiency and reduces losses.
Components of a Standard Courier Bill
Here’s a list of common elements that appear on a courier bill:
Shipper Name and Address
This should include the name of the business, full address as registered with the government and also the GSTIN.
Company of Courier Service Provider
An example of this is Delhivery or Blue Dart or XpressBees, etc.
The Invoice Number and Date
Each courier bill has its own unique number assigned to it for ease of reference.
Billing Period
Billing periods can vary, such as from 1st January to 7th January; billing is done monthly as well.
Shipment Information
For every order, the following information is provided:
- AWB Number
- Order ID
- Name of Customer
- Date of Pickup
- Date of Delivery
- Pin Code of Delivery Location
- Delivery Status
Weight Information
There are two main categories of weight:
- Actual Weight
- Volumetric Weight
The greater of the two types of weight will be used to determine the Charges.
Charges Related to Shipping
Charges associated with shipping are based on:
- Weight
- Zone (local, regional, national)
- Mode of Transportation (surface or air)
Cash On Delivery Charges
The Cash On Delivery (COD) charge is either a flat rate fee or a percentage of the total cost of the order.
Fuel and Handling Surcharge
Most Courier companies will apply a surcharge based on fuel and handling, generally in the range of 10%-25%.
Other Fees
- Other Fees may apply based on:
- Charges For RTO (Return to Origin)
- Additional Fees for Remote Locations
- Reattempt Fees
- Oversize Fees
GST Breakdown
Couriers generally apply an 18% Goods and Services Tax (GST) on Shipping Charges.
Total Amount Invoice
The total amount the Customer owes, which is a combination of all charges and GST.
How Courier Charges Are Calculated
To understand a courier bill fully, you must know how charges are calculated.
The formula generally used is:
Shipping charge = (Weight × Rate per kg) + Surcharges + GST
But the real calculation involves many other components.
Actual Weight vs Volumetric Weight
- The most significant component of a Courier invoice is the Weight of the Courier.
- The Courier’s Charge (based on physical weight of the shipment).
- The size of the package dictates the Charge.
Each courier service has a different formula to determine the Preparation Charge based on the shape and size of the package.
Surface Charge (Road Transportation)
Dimensional Weight (Volume) = (Length × Height × Width) ÷ 5000
Air Charge
Dimensional Weight (Volume) = (Length × Height × Width) ÷ 6000
Unit of measurement to be in Centimetres
The Weight (Volumetric or Dimensional Weight) that is greater will be used for the Charge.
For Example: A Consignment Package weighing 1kg with Measurements of 40×30×20 cm.
The Dimensional Weight (Volume) of the Consignment Package is: (40 × 30 × 20) ÷ 5000
= 4.8 kg (Dimensional Weight).
Therefore, the Courier Company would apply a Charge of 5kg and not the Charge of 1kg.
This also accounts for the higher than expected cost of Courier Services.
Understanding Zonal Charges in a Courier Bill
Courier charges depend on zones such as:
- Local (within same city)
- Zonal (within the same region)
- National (across regions)
- Remote (difficult-to-reach pin codes)
Each has different price slabs.
Example Price Slabs (Approx.)
| Weight | Local | Zonal | National |
| 500g | Lowest price | Lowest price | Lowest price |
| 1kg | Lowest price | Lowest price | Lowest price |
| 2kg | Lowest price | Lowest price | Lowest price |
Actual charges vary depending on the courier company and contract.
Delivery Type Impact on Courier Bill
Depending on which delivery option they choose, a courier’s charges may include:
Shipping via Surface
The lowest cost option, slower than other shipping options, best for sending large freight.
Air Shipping
Most rapid service, also most costly, especially for those shipments that are very time-sensitive/urgent and lightweight.
Express delivery
Higher cost option for same-day and next-day deliveries as compared to non-express services.
Hyperlocal Delivery
Fast delivery option within three to six hours.
Each of these variations will show clearly on the customer’s courier bill.
COD Charges in Courier Bill
Cash-on-delivery (COD) involves additional charges.
Two types:
Percentage Method
1% – 2% of COD amount.
Flat Rate Method
Lowest price per order.
Example:
COD amount = Lowest price
COD fee = 1.5% = Lowest price
So the courier bill will include the lowest price as COD charge.
Fuel Surcharge and Handling Charges
Courier companies apply fuel surcharges to cover fuel price fluctuations.
Range: 10% – 25%
Handling surcharge may apply for:
- Fragile goods
- High-value items
- Oversized parcels
These are clearly mentioned in the courier bill.
RTO Charges in Courier Bill
RTO = Return to Origin
When a shipment is returned:
- Customer rejected
- Address incorrect
- Customer not available
RTO cost is often equal to or higher than forward shipping.
For example:
Forward charge = Lowest price
RTO charge = Lowest price
Businesses must monitor their RTO charges regularly.
Remote Area Charges
For deliveries in remote pin codes, courier bills may include:
- Remote Delivery Surcharge
- ODA (Out of Delivery Area) Fee
These range between ₹30 – ₹80 per shipment.
Weight Disputes in Courier Bill
Weight disputes happen when the courier company claims the parcel weighs more than what the shipper entered.
Reasons:
- Incorrect measurement by seller
- Wrong packaging
- Bulky boxes
- Courier’s weight machine auto-calculating volumetric weight
How to avoid:
- Use a digital weighing scale
- Measure length, breadth, height accurately
- Use smaller packaging
- Avoid heavy fillers
- Use courier aggregator dispute resolution systems
How Businesses Can Verify the Courier Bill
Confirm AWB Numbers
Use Your Orders To Check Against AWB Numbers.
Review Actual Billable Weights
Compare The Actual Weight To The Billed Amount For Discrepancies.
Confirm Zone Home
Ensure Your Zones Are Mapped Correctly.
Manually Process GST
Confirm Your GST/Tax Rates Match Charges Applied To The Order.
Review COD/RTO Fees
Ensure They Have Been Correctly Applied And Charged.
Use Automation When Billing
Many Of The Courier Aggregators Have Tools For Automated Bill Verification.
Courier Bill Format (Example)
Courier Bill Sample Layout
Courier Company: Delhivery
Shipper: ABC Traders
Invoice No: DL/INV/2145
Date: 01 Jan 2025 – 07 Jan 2025
| AWB | Weight (kg) | Mode | Zone | Charge | COD | RTO | Total |
| 123456789 | 1 | Surface | Local | Lowest price | Lowest price | Lowest price | Lowest price |
| 123456790 | 2 | Surface | National | Lowest price | Lowest price | Lowest price | Lowest price |
| 123456791 | 0.5 | Air | Zonal | Lowest price | Lowest price | Lowest price | Lowest price |
| 123456792 | 4 | Surface | National | Lowest price | Lowest price | Lowest price | Lowest price |
Subtotal: Lowest price
Fuel Surcharge (18%): Lowest price
GST (18%): Lowest price
Total Payable: Lowest price
Courier Bill in eCommerce Business
ECommerce sellers rely heavily on courier bills for:
- Profit calculation
- Returns management
- COD settlement
- Shipping cost optimization
Courier bill accuracy directly impacts profit margins.
Courier Aggregators and Automated Courier Bills
Courier aggregators like:
- Shiprocket
- NimbusPost
- Pickrr
- Shipyaari
- iThink Logistics
Provide automated courier billing features.
Benefits
- Weight reconciliation
- Auto-dispute system
- Bulk bill download
- Transparent pricing
- No hidden charges
Courier aggregators simplify billing for businesses.
How to Reduce Courier Bill Amount for Your Business
There are effective ways to save on shipping.
Package Items Properly
Do not use larger boxes than needed.
Compare Different Companies
Select the lowest priced courier for each shipment.
Lower the RTO Rate
Send Non-Delivery Reports (NDRs) and verify addresses.
Ship Freight In Bulk
Ask for volume discounts from your shipping company.
Use Shipping Aggregators
Take advantage of their discounted shipping rates from multiple providers.
Optimize Weight Slabs
Keep your packages under lower weight slabs, for example, 500 grams or 1 kilogram.
GST on Courier Bills
Courier companies charge 18% GST on:
- Forward shipping
- RTO
- COD
- Fuel surcharge
- Handling charges
Businesses can claim 100% GST input credit.
Why Courier Bills May Vary Every Week
Reasons:
- Changes in fuel surcharge
- Weight disputes
- Increased RTO
- Remote area deliveries
- Festive season surge pricing
This is why weekly bill verification is essential.
Common Mistakes Sellers Make While Reading Courier Bills
- Ignoring volumetric weight
- Not checking remote area surcharges
- Forgetting to review COD charges
- Missing double-charged RTO entries
- Not verifying GST calculations
- Blindly trusting automated billing
Avoiding these mistakes saves money.
Is Online Courier Billing Safe and Accurate?
Yes, modern digital courier billing is:
- Automated
- Error-free
- GST compliant
- Transparent
However, manual verification is still recommended.
Conclusion
Companies that send items utilize a courier bill in their business operations. The courier bill indicates the amount that the business has paid for shipping items via courier service, including any additional expenses related to shipping (e.g., GST). Understanding how to read and interpret the information presented in the courier bill will help prevent an overcharging scenario, aid in resolving pricing discrepancies, improve the efficiency of the shipping process, minimize shipping expenses, and maximize operating profits.
All aspects of the courier bill—including actual and volumetric weight, RTO costs, COD costs, fuel surcharge, GST charges, and zone-based shipping costs—play critical roles in determining the total of the courier bill.
Being knowledgeable about what goes into a courier bill can assist small businesses, logistics managers, and eCommerce business owners in operating as efficiently and cost-effectively as possible.
FAQs About Courier Bills
Que: What is a courier bill?
Ans: A courier bill is an invoice issued by a courier company showing shipment charges, weight, GST, COD fees, and other logistic costs.
Que: Why is volumetric weight used for billing?
Ans: Volumetric weight is used to charge for large boxes that take more space even if they weigh less. The higher of actual or volumetric weight is billed.
Que: How can I reduce my courier bill amount?
Ans: Use proper packaging, reduce RTO, use courier aggregators, select the correct courier partner, and monitor weekly bills.
Que: How is GST calculated on courier bills?
Ans: Most courier companies charge 18% GST on total shipping cost, including fuel surcharge and handling.
Que: What should I check in a courier bill?
Ans: Verify AWB numbers, weight, zones, COD charges, RTO fees, GST accuracy, and additional surcharges.