GST Registration for E-commerce Operator

In recent times, the ecommerce sector in India has witnessed exponential growth as several online portals have come up in the country that provide a wide range of products to consumes all across the country. Considering the rapid growth of ecommerce domain, the government of India has introduced a special guideline and provision for ecommerce operators in regard to GST registration. This can be defined as registering GST for online business. 

The announcement of GST for ecommerce operator was made by the government in June of 2022 which states that ecommerce business with an annual turnover of up to Rs. 40 lakh need to register themselves for GST. However, it is necessary to note that this becomes applicable to only intra-state supply of products rather than inter-state supplies. Let’s get to know everything about GST for ecommerce sellers in the following post. 

What is GST Registration for E-Commerce Business?

The Goods and Services Tax (GST) refers to an all-inclusive indirect tax charged by the government of India against the supply of goods and services in India. This tax was brought by the authorities to replaced several different types of indirect taxes particularly service tax, and value-added tax (VAT). According to guidelines stated under the GST law, any individual or business engaged in the supply of goods or services regardless of their annual turnover are obliged for GST registration. For e-commerce operators, such as online stores, it is necessary to father and remit the GST on behalf of the sellers listed on their platform. At present, it is extremely necessary for businesses to register themselves on GST portal to sell on e-commerce platforms in India.

As per the section 2(44), ecommerce refers to the supply of good or services or both through online channels like websites, social media platforms like WhatsApp etc. There are 3 major parts in an ecommerce setup – the buyer, the seller, and the ecommerce operator. 

The waiver of GST registration is applicable to e-commerce operators that have an annual of turnover up to Rs 1.5 crore registered under the GST composition program. The scheme is project to bring down the compliance cost for small taxpayers with lower tax rates of 2 per cent of turnover for manufacturers, 1 per cent for traders, and 5 per cent for restaurant operators.

Procedure for GST Registration for Ecommerce Seller

If you want to know how you can register for GST, refer to the following steps. 

• Go to the website – gst.gov.in; navigate to Services>Registration>New Registration
• The new registration form will emerge; choose Taxpayer under ‘I am a’ dropdown and share other information such as business name, location, email ID, PAN, and mobile number. Enter the captcha and click on ‘Proceed’ 
• Verify OTP on mobile and email and click on ‘Proceed’
• It is Part A of the GST registration process
• Your Temporary Reference Number (TRN) will be produced now. Click on ‘Proceed’
• Enter your TRN, captcha and click on ‘Proceed’ 
• Verify the OTP again and click on ‘Proceed’ 
• Your saved application will come up with an expiry date of around 15 days; Click on ‘Action’
• Now complete your business profile on the portal which has 10 fields – Business Details, Promoter, Authorized Signatory, Authorized Representative, Principal Place of Business, Additional Places of Business, Goods and Services, State Specific Information, Aadhaar Authentication and Verification
• After filling all the details, choose the name of the authorized signatory from the ‘Name of Authorized Signatory’ drop-down list
• In the Place field, enter the city where the form was filed, for example, Mumbai, Hyderabad etc.
• The GST registration application needs to be digitally signed using Digital Signature Certificate (DSC) or e-sign wherein OTP will be sent to the Aadhaar-registered mobile number or e-verification code (EVC) wherein OTP will be sent to the registered mobile number
• Message for application ‘Success’ will be shown
• You will get acknowledgement of the successful application on your registered mobile number and email ID with the Application Reference Number (ARN)
• You can track the status of your application under ‘Track Application Status’ on the GST portal
• GST registration for ecommerce business takes nearly one week to assign the 15-digit Goods and Services Taxpayer Identification Number (GSTIN) and registration certificate in Form GST REG-06

Documents Required For eCommerce GST Registration

To register an ecommerce business for GST, one should arrange the following documents.

• PAN Card of the Company’s director or Proprietor
• PAN Card of the authorized signatory
• AOA/MOM
• Pan Card of the business
• TDS information
• Certificate of Incorporation issued by the Ministry of Corporate Affairs

How to file GST for an eCommerce operator?

The GST portal is the place where you can submit your GST returns online. There are easy to follow steps when it comes to filing GST registration for e-commerce businesses:

• Launch the GST portal.
• Given your state code and PAN number, you will get a 15-digit GST identification number.
• Upload your invoices on the GST portal. Each invoice is allotted an invoice reference number against it.
• Provide your outward return, inward return, and cumulative monthly return. In the case of any errors, you have the option to rectify the mistake and resubmit your return.
• File your GSTR-1 outward supply returns on or before the 10th of the subsequent month.
• File GSTR-2A detailing the outer supplies given by the supplier to the recipient.
• The recipient needs to now verify, validate, and change the details of outward supplies, and file credit or debit notes.
• The recipient must file GSTR-2 details regarding the inward supplies of taxable goods and services.
• The supplier can accept or reject or reject the recipient’s modifications to inward supplies in GSTR-1A.

How to download a GST certificate online?

It is very simple to get a GST certificate online. 

Log in to the portal – www.gst.gov.in by entering your credentials.

• Visit your dashboard.
• Now, click Services.
• Select User Services from the drop-down menu.
• View or Download Certificates, then click the download button.

What are the advantages of GST registration for ecommerce operators?

There are numerous benefits ecommerce players avail by registering themselves on the GST portal.

Input tax credit –The claiming of input tax credit can only be done by ecommerce players through GST registration. They are obliged to eliminate GST paid on input against the collected GST on sales.

Increased competitiveness – This is guaranteed due to the elimination of the cascading effect of taxation. 

Border markets – It becomes possible for ecommerce players to sell their offering in other states without paying any additional tax. 

Simplified taxes – It is always a benefit to pay one tax instead of paying multiple taxes. 

What are the registration requirements for ecommerce players?

For the purposes of GST registration, online retailers are categorised as either suppliers of products or suppliers of services. In addition to selling through their stores and offices, they could sell products and services through one or more online retailers.

Selling products:  

The goods provider is required to register for GST. The turnover threshold exemption does not apply to the provision of products. Prior to selling on the e-commerce platform, sellers need to register with the GST. When registering on any site, including Flipkart, Amazon, and others, a GSTIN is required.

Sale services:

Sellers must register for GST only if their annual revenue exceeds Rs 20 lakh/10 lakh. GST is not due on transactions made through an e-commerce operator if the vendor is not registered.

Offering the services specified in Paragraph 9(5):

These merchants are exempt from the GST registration requirement, even if their revenue exceeds the threshold level. Some instances of these service suppliers include

Must Read: What is the Difference Between GST and VAT?

1. People that offer passenger transport services through online retailers like OLA, UBER, and the like.
2. Hotel service providers via booking aggregators like Make My Trip, Goibibo, etc.
3. Housekeeping service providers via sites that aggregate content, like Urban Clap

A person cannot register under the composition scheme if they offer products or services through an e-commerce operator.

FAQs

Is it possible to trade without a GST number?

Yes, it is possible to trade without a GST number. A trader who is involved in the sale of exempted products or whose annual turnover is under Rs. 20 lakhs is not supposed to register under GST.

Can I choose to use Amazon seller without registering for GST?

No, GST registration is essential when it comes to selling your products through Amazon Seller.

Is GST registration for e-commerce seller mandatory?

Yes, GST registration is essential for all e-commerce players, irrespective of their annual turnover. Every e-commerce operator is obliged to register its business with the GST either before starting their venture or within a month of doing so.