GST Registration For Small E-Commerce Sellers To Begin Nov 1

The government will introduce a simplified goods and services tax (GST) registration facility for small e-commerce sellers from Nov 1, following recommendations made at the 57th GST Council meeting.

As per a report by Business Standard, the necessary system changes were complete and the facility would become operational on the GST portal next month. Notifications and procedural guidelines would also be released shortly.

The proposed optional mechanism, introduced under Rule 14B of the Central Goods and Services Tax (CGST) Rules, 2017, aims to simplify interstate registration for smaller businesses.

Eligible sellers operating exclusively through electronic commerce operators (ECOs) can register in other states using the platform's warehouse as their principal place of business.

This removes the requirement to establish separate offices or shops in those states. However, the facility is restricted to sellers passing on input tax credit (ITC) of not more than ₹2.5 lakh monthly.

Applicants must maintain a physical business presence and an existing GST registration in at least one state, designated as their home state. Registrations obtained through this mechanism will apply exclusively to supplies made through e-commerce platforms.

The system will also obtain consent from the relevant e-commerce operator.

According to the report, a committee would examine Section 16(2)(c) of the CGST Act, which links buyers' ITC eligibility to suppliers' actual tax payments. The committee is expected to submit its findings within three months.

The GST Council will subsequently consider the recommendations before making a final decision. Several states had sought a detailed examination of the provision during the Council's 57th meeting.

Currently, buyers may lose ITC despite possessing valid invoices, receiving supplies and paying suppliers if the corresponding tax remains unpaid to the government.

The official indicated that changes arising from the review could take effect from April 1 next year. Additional notifications concerning GST refund reforms are also expected shortly.