What is GST Registration?
GST registration involves a business obtaining a unique 15 digit GSTIN (Goods and Services Tax Identification Number). This GSTIN is essential for legally collecting and remitting Goods and Services Tax to the government. For e-commerce businesses, GST registration is mandatory, a requirement that ensures compliance with tax laws and facilitates smooth business operations.
Why is GST Registration mandatory for all e-commerce operators?
Understanding the importance of GST for Indian e-commerce businesses requires grasping its fundamental principles and impact. The Goods and Services Tax (GST) is a destination-based tax, meaning it's levied at the point of consumption rather than the point of origin. This system replaced the previous tax regime, which involved multiple cascading taxes that often resulted in inefficiencies. GST registration is particularly crucial for e-commerce businesses due to the sector's rapid growth and broad reach. The GST foundation mandates registration for e-commerce operators and businesses whose annual turnover exceeds a specific threshold, which varies depending on the business type and the state. This requirement ensures that all participants in the e-commerce ecosystem adhere to uniform tax regulations, fostering fair competition and greater accountability in tax compliance.
Eligibility Criteria for E-Commerce Business
The GST registration requirements vary based on the nature of the business and its annual turnover.
| Business Type |
Turnover Threshold |
Registration Requirement |
| Suppliers of Goods |
₹40 lakhs |
Mandatory registration if annual turnover exceeds ₹40 lakhs. |
| Suppliers of Services |
₹20 lakhs |
Mandatory registration if annual turnover exceeds ₹20 lakhs. |
| E-commerce Operators |
No threshold |
Mandatory registration regardless of turnover. |
| Suppliers through E-commerce Platforms |
No threshold |
Mandatory registration regardless of turnover. |
| OIDAR Service Providers (Foreign Entities) |
No threshold |
Mandatory registration regardless of turnover. |
Documents Required for GST Registration for E-Commerce Business
The following documents are required for GST registration of e-commerce businesses -
- PAN Card of the Proprietor or Company Director
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- PAN Card of the Authorised Signatory
- Aadhaar Card of the Authorised Signatory
- TCS Details
- Certificate of Incorporation
- PAN Card of the Company
GST requirements for e-commerce operators
Here are the GST requirements for e-commerce businesses:
- GST Registration: E-commerce sellers must register for GST, even if their annual turnover is below ₹40 lakhs for goods and ₹20 lakhs for services (₹10 lakhs for special category states). Registered sellers must display their GST registration number on their website and all invoices.
- GST Collection and Payment: E-commerce sellers are responsible for collecting and paying GST on their sales. They must charge GST on their products and remit the collected amount to the government within the stipulated timeframe. The applicable GST rate depends on the type of products sold and the nature of the business.
- GST Return Filing: E-commerce sellers must regularly file GST returns detailing their sales, purchases, and tax liability. The frequency of filing depends on their turnover. They are required to file GSTR-1, which reports outward supplies, and GSTR-3B, which summarizes sales, purchases, and tax liability.
- Tax Collected at Source (TCS): E-commerce operators are required to collect TCS at a rate of 1% from sellers on taxable supplies made through their platforms. This TCS must be deposited with the government and reported in the operator's GSTR-8 return.
Exemptions and Restrictions
- Supplier of services exemption - Suppliers of services, except those covered under the TCS provisions and having a turnover of less than Rs. 20 lakhs, are exempt from registering under GST.
- Composition Scheme - E-commerce operators liable to collect TCS under section 52 cannot opt for the GST composition scheme. This scheme allows businesses to pay GST at a nominal rate of turnover and simplifies compliance, but is not available to those collecting TCS.
Steps to Obtain GST Registration for E-Commerce Businesses
Step 1: Access the GST Portal
- Visit the official GST website.
- Navigate to Services > Registration > New Registration.
Step 2: Start the New Registration Process
- In the registration form, select ‘Taxpayer’ under ‘I am a’.
- Fill in details like business location, legal name, PAN, email ID, and mobile number.
- Enter the captcha and click ‘Proceed’.
Step 3: OTP Verification
- You’ll receive an OTP on your registered mobile and email.
- Enter the OTPs and click ‘Proceed’.
- This completes Part A of FORM GST REG-01.
Step 4: Receive Temporary Reference Number (TRN)
- After Part A, a Temporary Reference Number (TRN) is generated.
- Click ‘Proceed’, enter TRN and captcha, then verify OTP again.
Step 5: Complete Your GST Profile
- Your saved application will appear (valid for 15 days). Click ‘Action’.
-
Fill out 10 sections:
- Business Details
- Promoter/Partners
- Authorized Signatory
- Authorized Representative
- Principal Place of Business
- Additional Places of Business
- Goods and Services
- State-Specific Information
- Aadhaar Authentication
- Verification
- Select the authorized signatory and enter the place of filing (e.g., Delhi, Mumbai, etc.).
Step 6: Digital Signature and Submission
-
Sign the application using:
- Digital Signature Certificate (DSC)
E-Sign (OTP to Aadhaar-linked mobile)
- EVC (OTP to registered mobile)
- Upon successful submission, you’ll see a confirmation message.
Step 7: Acknowledgement & Application Tracking
- You’ll receive an Application Reference Number (ARN) via SMS and email.
- Track your application under ‘Track Application Status’ on the GST portal.
Step 8: Receive Your GSTIN
- Processing takes about 6 days.
- You’ll be assigned a 15-digit GSTIN and receive a registration certificate (Form GST REG-06).
Post-Registration Requirements
After registration, businesses must:
- Display the GSTIN on their website and invoices.
-
File regular GST returns, including:
- GSTR-1: Reports outward supplies.
- GSTR-3B: Summarizes sales, purchases, and tax liabilities.
- GSTR-8: Applicable for e-commerce platforms collecting TCS (Tax Collected at Source).
- Collect & remit GST on all taxable sales.
When Can an E-Commerce Business Cancel GST Registration?
E-commerce businesses in India must register for GST, but under specific conditions, they can apply for cancellation, either voluntarily or as required by tax authorities.
1. Business Closure
An e-commerce business can cancel its GST registration if it permanently shuts down. In such cases:
- No need to collect or remit GST.
- Clear all pending tax liabilities and file all returns before applying for cancellation.
2. Business Transfer (Merger, Acquisition, or Demerger)
If an e-commerce business is merged, acquired, or transferred:
- The new entity must apply for fresh GST registration.
- The original business must cancel its GST registration.
3. Change in Business Structure
If a business changes its legal structure (e.g., from a partnership to a private limited company), leading to a change in its PAN:
- Cancel the GST registration under the old PAN.
- Register for GST under the new PAN.
4. Turnover Falls Below the Threshold
For most businesses, GST registration is mandatory if turnover exceeds:
- ₹40 lakhs for goods (₹20 lakhs for special category states).
- ₹20 lakhs for services.
Exception: E-commerce sellers must register regardless of turnover and cannot cancel based on revenue drop.
5. Involuntary Cancellation by Tax Authorities
Tax authorities may cancel GST registration if a business:
- Fails to comply with GST regulations.
- Does not file GST returns for a prolonged period.
- Is found involved in fraudulent activities or GST misuse.
Before cancellation, the GST department issues a show-cause notice, allowing the business to respond.
Procedure to Cancel GST Registration for E-Commerce Businesses
To cancel GST registration, follow these steps:
- Submit Form GST REG-16: Log in to the GST portal and apply for cancellation, specifying the reason, effective date, and details of any pending tax liabilities.
- Provide a Valid Reason: Clearly mention why the cancellation is requested.
- Clear Dues and File Returns: Ensure all pending GST returns are filed and outstanding liabilities are settled before applying.
- Tax Officer’s Review: The tax officer will verify the application and documents. If approved, the cancellation order (Form GST REG-19) will be issued, effective from the specified date.
Are you an e-commerce business owner looking to register for GST? Tax2win makes the process simple, fast, and hassle-free with expert guidance at every step.
Why Choose Tax2win for GST Registration?
- Expert Consultation – Tailored solutions based on your business needs
- Seamless Process – Quick and efficient GST registration
- Compliance Assurance – Stay legally compliant with GST regulations
- Dedicated Support – Assistance from experienced professionals
Book Online CA Now!
