Register GST for E-commerce Business

Last Updated at: Jul 06, 2021
Register GST for e-commerce Business
Register GST for e-commerce Business
2020 has given a significant boost to e-commerce. The industry is expecting to get certain tax exemptions from the upcoming Union Budget 2021 so that more SMEs can come online and bolster the e-commerce space.


E-Commerce is described under Sec 2(44), CGST Act, 2017 as the supply of goods or service over an electronic network. And a person who directly or indirectly owns or manages an electronic facility or platform or GST for e-commerce is an e-commerce operator (ECO) under Section 2(45) of CGST Act, 2017.

E-commerce in India has been on an upward growth route. It is expected to reach US$99 billion by 2024 and become the second largest e-commerce market after the US. Global players, Facebook and Google, have also made huge investments in the Indian e-commerce market. Additionally, the Central Board Of Excise & Customs (CBEC) has looked at its high growth potential and tax complexity, hence, providing special provisions for e-commerce GST registration

If you are planning to start an e-commerce venture, here is the post explaining GST, TDS, and TCS under GST, and the registration process. 

Goods and Services Tax (GST)

GST is an indirect and destination-based tax as it is applied on goods and services at the end place of consumption. Moreover, it is collected at every stage of sale or purchase. So, it is a multistage, comprehensive, destination-based tax.

All e-commerce dealers/traders/aggregators selling goods/services online are required to get registered for GST under Section 24 (ix) and (x), Central Goods and Service Tax Act, 2017, irrespective of their turnover, excepting exempted categories. They need to collect and deposit tax @1% (0.5% CGST + 0.5% SGST) from each transaction. 

Eligibility Criteria

To understand the eligibility criteria, one needs to understand TCS and TDS on GST along with Section 2(44) and Section 2(45) of CGST Act, 2017, defining e-commerce business and e-commerce operators. 

Tax Collected at Source (TCS) 

The e-commerce operator (ECO) is responsible for collecting TCS. As per Section 52(1) of the CGST Act of 2017, every ECO will collect the tax maximum @1% of the net value of taxable goods or services from the supplier making supplies through the operator’s online platform. Further, it is the electronic/digital commerce u/s 2(44) and the ECO is defined u/s 2(45).

  • If ECOs are operating through their own website and dealing in their own products, then they need to register GST for e-commerce under the category of the taxpayer (normal). For example, Oppo owns, operates, and manages its website itself. The company is selling its own products through its own website. 
  • Moreover, on the other hand, if ECOs getting supplies from suppliers to sell on their online platforms, then they need to apply under the category of the tax collector (e-commerce). For example, Oppo sells products through Amazon, Flipkart, snap deal, etc. 

register for GST online

So, there are two models for e-commerce GST 

  • Registration for ECO 
  • Registration for person supplying through ECO

Tax Deducted At Source (TDS) Under GST

TDS under GST is a withholding of GST to deposit with the government. Categories Under Section 51, CGST Act, 2017, to deduct TDS @2% (1%CGST+1%SGST) before making payments to the supplier. It is applicable on taxable goods and/or services if the transaction value exceeds Rs.2,50,000. Additionally, some of these categories are departments of the central government or state government, local authorities, governmental agencies, etc.

How to register GST for e-commerce

The GST registration process is completely online. No need to submit any hard copy of print outs or proofs is required for the enrolment. The following are the steps for GST registration for e-commerce seller: 

Step 1:

Go to GST registration official website 

Step 2:

Go to ‘Services’ at the menu bar on the left side > Select Registration > New Registration. 

Step 3:

You are redirected to the GST registration online form. Select your category, i.e., the taxpayer or a tax collector (e-commerce). 

Note: It will be best to take advice from a CA, CS, or GST practitioner before selecting the category. For guidance, you can connect to the Vakilsearch team, which is proficient in legal matters. 

Permanent Account Number (PAN), Aadhar number, address proof, proof of business registration, bank account statements, legal name of the business, email address, and mobile number. You will get your GST number within three working days. 

Registration Fee 

Although you may have charge any fee for GST registration through the online mode under the Goods and Services Tax (GST) jurisdiction, you may need to pay nominal charges for the professional services to avail GST. 

How to Calculate Net Value of Taxable Supplies

Section 52 (1) defines the net value of taxable supplies as the difference between the ‘total value of monthly taxable supplies [except services mentioned under Section 9(5)]’ through the ECO and the ‘total value of monthly taxable supplies returned to the suppliers’.

The Bottom Line 

GST is compulsory for every type of business and most of the business operators need guidance while applying for GST. Whatever the issue you are facing to apply for GST registration, you can connect with Vakilsearch to solve your matters.