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GST · Registration & returnsGST registration for e-commerce sellers: applicable rules
Selling online changes the GST rules – registration is usually compulsory regardless of turnover, the marketplace collects TCS on your sales, and returns must reconcile with the operator's data. Here is how GST works for e-commerce sellers.
E-commerce brings small sellers national reach – and special GST rules. The key provisions are Section 24(ix) (compulsory registration), Section 52 (TCS by e-commerce operators) and Section 9(5) (operator pays tax for notified services such as food delivery and passenger transport).
Registration rules
| Seller | Registration |
|---|---|
| Goods through operator, inter-State sales | Compulsory, irrespective of turnover |
| Goods through operator, only intra-State, turnover below threshold | Not required if conditions met – enrol with an enrolment number on the GST portal (from 1 October 2023) |
| Services through operator, turnover below ₹20 lakh | Not required |
| Services under Section 9(5) (restaurant via food apps, cab via ride apps) | Operator pays tax; supplier need not register for these supplies alone |
The enrolment option for small intra-State goods sellers requires a PAN, the seller to deal only within one State and not to be registered elsewhere – the operator checks this before allowing listings.
TCS by the operator
- Rate: 0.5% of net value of taxable supplies made through the platform (from 10 July 2024).
- The operator files GSTR-8 by the 10th of the following month.
- The TCS appears in the seller's portal under TCS credit; the seller accepts it, and the amount is credited to the electronic cash ledger, usable for paying GST.
- Income-tax TDS of 0.1% under the e-commerce provision (old Section 194O) is separate.
Returns and reconciliation
Sellers file GSTR-1 and GSTR-3B like any other registered person. In GSTR-1, supplies through operators are reported in a separate table (Table 14 / 15) with the operator's GSTIN, along with B2B and B2C details. Mismatches between the seller's GSTR-1 and the operator's GSTR-8 trigger notices.
Worked example
Example: Pooja runs "Kala Prints" from Shalimar Bagh, selling printed cushion covers on two marketplaces across India. Monthly sales: ₹6,00,000 (excluding GST), GST at 5%, with returns of ₹40,000.
| Item | Amount |
|---|---|
| Gross sales | ₹6,00,000 |
| Less returns | ₹40,000 |
| Net taxable supplies | ₹5,60,000 |
| Output GST @ 5% | ₹28,000 |
| TCS by operators @ 0.5% | ₹2,800 (credited to cash ledger) |
| ITC on fabric, printing, packaging (from GSTR-2B) | ₹18,500 |
| Net GST payable | ₹28,000 – ₹18,500 = ₹9,500, of which ₹2,800 from TCS credit, ₹6,700 cash |
Because she sells inter-State, registration is compulsory even though her annual turnover (₹67 lakh) is above the threshold anyway. Pooja must also handle place of supply correctly – IGST for other States, CGST + SGST for Delhi buyers.
Fulfilment centres and additional places of business
If the platform stores your goods in its warehouse in another State, you need registration in that State (or at least the warehouse must be added as an additional place of business in a State where you are registered). Many sellers miss this.
Composition dealers online
Since October 2023, composition taxpayers can sell goods within their State through operators, paying 1% (traders/manufacturers), but cannot sell inter-State. This suits small local sellers.
Common mistakes
- Not accepting TCS credit on the portal, leaving money unused.
- Reporting platform sales as B2C without operator GSTIN.
- Ignoring fulfilment-centre States.
- Treating payout received (after commission and TCS) as turnover instead of gross sale value.
- Not reconciling platform settlement reports with books.
Key takeaway
Online goods sellers usually need GST registration regardless of turnover, must report platform sales separately, and should claim the 0.5% TCS credit. Reconcile platform reports monthly. Our GST service handles marketplace reconciliation for sellers in Delhi – see also ITC for e-commerce businesses.
Official references
Provisions discussed (summaries in our Law Library):
- CGST Act, 2017 – Section 24: Compulsory registration
Official sources to verify the current text, notifications and circulars:
Frequently asked questions
Is GST registration compulsory for selling on e-commerce platforms?
For goods, Section 24 requires registration for persons supplying through an e-commerce operator that collects TCS, irrespective of turnover. From October 2023, intra-State sellers of goods below the threshold can sell without registration (with an enrolment number) subject to conditions.
What is the TCS rate collected by marketplaces?
0.5% of net taxable supplies (0.25% CGST + 0.25% SGST, or 0.5% IGST) from 10 July 2024, reduced from 1%. It is credited to the seller's cash ledger.
Can a composition dealer sell online?
Since 1 October 2023, composition taxpayers can supply goods intra-State through e-commerce operators, subject to conditions. Inter-State supplies remain barred for composition dealers.
Do service providers on platforms need registration?
Service providers supplying through e-commerce operators are exempt from compulsory registration if their aggregate turnover is below the ₹20 lakh threshold (₹10 lakh in some States).
Do I need registration to sell on Instagram?
Social media is not an e-commerce operator collecting TCS. Normal thresholds apply, but inter-State supplies of goods require registration regardless of turnover.
Can a seller claim refund of excess TCS credit?
Yes. Unused balance in the cash ledger, including TCS credit, can be refunded through RFD-01.
Does TCS apply to services sold on platforms?
Yes, for services supplied through e-commerce operators other than those notified under Section 9(5), where the operator pays the tax itself.
This article is general information on the law as on 10 November 2026, written for educational purposes. It is not professional advice for your case. Section numbers under the Income-tax Act, 2025 should be confirmed with the official section mapping on the Income Tax Department website before use in filings.
Have a tax, GST or business question?
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