GOOD NEWS!!! Sell on E-commerce without any GST registration

The exchanging of products and services through the internet is known as E-commerce or Electronic Commerce. E-commerce is particularly important since it lowers transaction costs. Cost savings is one of the main benefits of ecommerce for businesses that keeps sellers interested in doing business online.

When selling through E-commerce, vendors were required to register for GST even if their aggregate yearly sales were less than the threshold limit which is of either ₹40 lakh or ₹20 lakh.

The 48th GST Council meeting was recently conducted on December 17th, 2022. In which various GST-related rulings were made. E-commerce was one of the meeting’s topics. They gave preliminary approval to a proposal that will allow unregistered Suppliers to make intrastate sales of products (within the same state) through E-Commerce platforms. 

Council has adopted a decision that would benefit small enterprises that are not required to register under GST (as they have turnover below the threshold limit) and still can sell their products online on E-commerce platforms with a condition that the sell should happen within the same state where the seller belongs. That means if Seller wants to sell products outside the state then he will have to mandatorily take registration irrespective of his turnover. The council has recommended that this scheme will be applicable from 1st Oct, 2023. 

With around 5 crore MSMEs in India who are unable to sell online due to compulsory GST requirements, this decision of GST council would definitely enable millions of small units. This will reduce compliance burden for smaller businesses especially Artisans, Weavers, Handcraft Makers, Artists, Freelancers and Home Makers as they can access markets through E-commerce even without registering under GST. This move will spur the Indian Economy benefitting MSMEs from a much larger addressable market, increased efficiencies and easier access to capital.

Below are Frequently Asked Questions on requirements of GST registration for E-commerce sellers

1. What were the rules and regulations regarding E-commerce before the amendments? 

Ans – While dealing via E-commerce, suppliers were forced to register for GST even if their total annual revenue were less than the threshold limit. 

2. What are the new E-commerce registration rules? 

Ans – In December 2022, the GST council notified new amendments for E-commerce and said no GST registration is required for E-commerce Operator and Participants for selling their products on E-commerce platform. These are contingent on a number of factors. The first is that the total turnover on an all-India basis must not be higher than the threshold level. A second factor is that the individual is not making any taxable interstate supplies. 

3. What is the threshold limit for unregistered suppliers? 

Ans-The GST threshold limit for states in the regular category is Rs. 40,00,000, while the GST threshold limit for states in the special category is Rs. 20,00,000. 

4. How will the changes in GST registration for e-commerce decision benefit small business owners? 

Ans-This outcome is beneficial to small enterprises that are not GST registered. Smaller firms can now sell their products on an enzyme surface even if they are not registered for GST and have revenue below certain thresholds. 

This Article has been written by Suyash Tripathi and can be reached at tripathi.r.suyash@gmail.com