Welcome, you are here because either you are an ecommerce seller or aspiring to be one.
In this blog I will clarify the current situation about requirement of GST registration to do ecommerce business (i.e. selling goods on ecommerce platforms like Amazon, Flipkart, Myntra, Meesho, Shopify, Indiamart etc).
Can I sell my product or services online on ecommerce website without registering in GST?
Well, technically YES but practically NO…………WHY?
I don’t mean to confuse you. Let me explain you with reason why the answer to the above question is YES and NO.
A. Technically you can sell on ecommerce platform without GST registration, if following conditions are met:
- Total turnover does not exceed the threshold level (levels explained later in the blog)
- You are NOT engaged in making taxable interstate supplies i.e. (supply to other states).
B. Practically, there are multiple reason that will not allow you to sell on such ecommerce platform. Some key reasons are as follows:
- When you are selling on such ecommerce platforms you cannot restrict yourself to just one state, you will have to sell to other states, so it is mandatory to register for GST in case of interstate supplies
- Most ecommerce platform have mandated the GST registration as part of the seller onboarding process. Which means you will not be able to become seller on ecommerce platform unless you are GST registered.
- Non registered sellers are bound to lose the input credit
- Non registered vendors will not be able to scale their business beyond GST threshold limit.
- Ecommerce operator will collect 1% of net taxable vale from your consideration, you will be able to take credit of this 1%, once you are registered under GST and you file your return.
Threshold
While it is almost not relevant for sellers on ecommerce, but here is the threshold for GST registration:
Annual turnover beyond which a supplier is requires GST registration, in normal states:
Supply of Goods: INR 40 Lakhs
Supply of Services: INR 20 Lakhs
Special threshold limit for special category states:
Supply of Goods: INR 20 Lakhs
Supply of Services: INR 10 Lakhs
Summary of threshold for GST registration
Activity | Type of state | Threshold (in INR) |
Supply of Goods | Normal Category states | 40 Lakhs |
Special Category States* | 20 Lakhs | |
Supply of Services | Normal Category states | 20 Lakhs |
Special Category States* | 10 Lakhs | |
Interstate Suppliers | Any | GST registration mandatory |
Ecommerce Operators | Any | GST registration mandatory |
ISD, Non-resident taxable person, casual taxpayer, RCM, TDS deductor etc. under GST Act | Any | GST registration mandatory |
*Special Category States currently include Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, for GST threshold purpose.
At Onlinecorpserv.com we can help you to get your business register for GST and handle your GST, Accounting and Income Tax compliance. So, you can focus on your core business activity. Also you can contact us for free consultation.
Leave a Reply