India’s electronic commerce (E-commerce) market is valued at roughly ₹10,82,875 crore, and is projected to grow to ₹29,88,735 crore by the year 2030. This shows that there is a booming trend in E-commerce. This is why understanding how GST applies to E-commerce is no longer optional.
E-commerce sellers must comply with special provisions under Section 52 of the CGST ACT. It helps you avoid penalties, interest and legal disputes. In this blog, we will understand everything about GST for E-commerce.
The term E-commerce has been clearly defined under the CGST Act 2017, which means supplying goods or services through digital or electronic means, like Amazon and Flipkart. E-commerce Operator, on the other hand, is a person who owns and manages an electronic facility or platform for electronic commerce.
GST law applies differently to e-commerce sellers compared to traditional offline businesses. There is a mandatory requirement to get registered under GST for anyone who sells goods or services through an E-commerce Operator (ECO), irrespective of turnover. Here are the key requirements for GST registration:
The location of a supplier and recipient in e-commerce transactions is the major determinant of the GST liability. This determines whether intra-state or inter-state tax is applicable. The most important types of GST that can be used are:
1. Intra-State Sales: CGST + SGST
In case the supplier and the recipient are in the same state, the transaction is regarded as an intra-state supply. Where this happens, the GST to be applied is divided equally between:
When a seller in Maharashtra sells goods to a buyer in Maharashtra, the seller will charge CGST and SGST on the sale.
2. Inter-State Sales: IGST
In case the supplier and the recipient are in different states, the transaction is considered an interstate supply. In this scenario:
The seller in Delhi who is supplying goods to a customer in Karnataka will pay IGST on the supply.
Under the GST law, marketplace or E-commerce operators are important in India since they are GST-compliant intermediaries that collect Tax Collected at Source (TCS). The concept of TCS enables proper transparency in online transactions. It is governed by Section 52 of the CGST Act, 2017, which mainly applies to ECOs.
Suppose a registered seller makes ₹1,00,000 in monthly sales via Amazon. Amazon will:
When the seller files their GST return, they can view this TCS entry on the GST portal (Form GSTR-2A) and claim it as Input Tax Credit (ITC).
Input Tax Credit (ITC) is an essential tool in the GST that enables E-commerce sellers to cut down their tax bill by claiming credit on the GST they paid on business purchases.
Claims of ITC should be submitted within a certain period of time, usually before 30th November of the next financial year or the date of filing the annual return (GSTR-9).
To sell products or services through any ECOs in India, obtaining a valid Goods and Services Tax Identification Number (GSTIN) is mandatory. GST registration provides several benefits, like a legal obligation to collect tax, claim input tax credit (ITC), and comply with return filing requirements.
The rise of digital commerce offers unmatched opportunities to Indian entrepreneurs, but it also demands a higher level of financial discipline. For e-commerce sellers, GST compliance is not just a legal requirement but a part of building a sustainable business. Accurate record-keeping not only helps you avoid penalties but also get a business loan.
1. Who is an E-Commerce Seller?
Under the GST Act, an E-commerce seller is someone who registers themselves under the act and thereafter provides taxable goods or services through online platforms.
2. Is it mandatory to be registered under GST for selling on Amazon or Flipkart?
Yes, all sellers who prefer selling via E-commerce operators must register for GST, regardless of turnover.
3. What is Tax Collected at Source (TCS) under GST?
TCS means the E-commerce operator deducts 1% of the seller’s taxable sales value and deposits it with the government. Sellers can later claim this as an Input Tax Credit (ITC).
4. Can small e-commerce sellers avoid GST registration?
No, even if your annual turnover is below ₹40 lakh, you must register for GST if you want to sell through any digital marketplace.
5. Does an E-commerce seller have to file any GST Returns?
Yes, E-commerce sellers must file GSTR-1 (sales details), GSTR-3B (summary return), and GSTR-9 (annual return).
6. Who comes u/s 9(5) of GST?
It is mainly applicable to E-commerce operators for certain specified services, such as cab aggregators, accommodation platforms, or food delivery apps. The section shifts tax liability from the seller to the e-commerce operator.
7. Can E-commerce sellers claim Input Tax Credit?
Yes, sellers can claim ITC on eligible business expenses like packaging, logistics, advertising, and platform commissions, provided valid GST invoices are available.
8. Is e-invoicing mandatory for E-commerce sellers?
Yes, but it is only applicable for businesses whose turnover exceeds ₹5 crore. Smaller sellers are exempt but should maintain GST-compliant invoices.
9. How can sellers check the TCS collected by platforms?
Sellers can log in to the GST Portal → Services → Returns → View GSTR-2A/2B. The complete details of TCS collected by the operator are visible there.
10. Where can I find official GST updates?
Official updates, notifications, and rule changes are published on:
