Quick answer
Whether you need GST to sell online depends on your turnover, what you sell, whether you sell across state lines and whether you sell through a marketplace that collects TCS. Rules for marketplace sellers have historically been stricter, and they have changed in recent years, so confirm your position with a chartered accountant before you start.
Whether you need GST registration to sell online depends on a few things: your total turnover, what you sell (goods or services), whether you sell to customers in other states, and whether you sell through a marketplace (an e-commerce operator) or only on your own website. Marketplace sellers have historically faced stricter registration rules than people selling through their own channels, partly because marketplaces must collect tax at source (TCS) on their sellers' sales. These rules have been changed more than once in recent years, so treat this guide as background and confirm your own situation with a chartered accountant (CA) before you start.
This is general information, not tax advice. GST law is detailed, changes through notifications, and depends on your facts.
What's the difference between your own website and a marketplace for GST?
Under GST, an e-commerce operator is a business that runs a digital platform where other people sell. Large marketplaces are e-commerce operators. When you sell on one, the operator is generally required to collect TCS on your sales and report them, and you can see these amounts and claim credit for them in your GST filings.
When you sell your own goods on your own website, you're a supplier making a sale directly. Your website platform and your payment gateway are service providers to you; they don't usually make you a "marketplace seller" in the GST sense, and they don't collect TCS on your sales the way a marketplace does. Your obligations then depend mainly on the normal rules: turnover, type of supply and where your customers are.
How do the two compare at a glance?
| Own website | Marketplace | |
|---|---|---|
| Who's the seller to the customer | You | You, through the operator's platform |
| TCS collected on your sales | Generally no | Generally yes, by the operator |
| Registration rules | Normal rules based on turnover and type of supply | Historically stricter; some relaxations for small sellers in recent years |
| Invoices | You issue them | Often generated through the platform for you |
| Payment to you | Through your gateway, minus gateway fees | Through the operator, minus commission, fees and TCS |
| Reconciliation | Your sales and gateway reports | Platform reports, TCS statements and settlements |
For a broader comparison of costs and control, read marketplace vs your own store.
When do you have to register for GST?
Ask your CA about each of these:
- Turnover threshold: registration becomes compulsory once your aggregate turnover crosses a threshold, which differs for goods and services and for some states. Ask your CA for the current figure for your state and business.
- Inter-state sales: selling goods to customers in other states has historically required registration regardless of turnover in many cases. This is a point to confirm carefully if you plan to ship across India from day one.
- Marketplace sales: rules for small sellers supplying through e-commerce operators have been relaxed in some situations in recent years, with conditions. Check what applies to you today.
- Voluntary registration: some sellers register before they must, to claim input tax credit, look more established to business buyers, or keep things simple as they grow.
- Composition scheme: a simpler scheme for some smaller businesses, with conditions and limitations that matter for online sellers. Your CA can tell you whether it suits you.
What is TCS and how does it affect marketplace sellers?
TCS (tax collected at source) under GST is a small percentage that a marketplace collects on the net value of taxable sales made through it, and pays to the government on your behalf. It isn't an extra tax on top of your GST: it shows up in your GST account and can be used against your tax liability. But it does affect your cash flow, because part of each settlement is held back, and it means you need to be registered and file returns to use it.
There's a separate income-tax deduction (TDS) that e-commerce operators may also apply to sellers' payments. Rates for both have changed in recent years, so check the current ones with your CA.
When you sell on your own website, there's no marketplace collecting TCS, so payments arrive in full, minus your payment gateway's fees.
What do you need to do on your own website once registered?
- Issue a proper GST invoice for each order, with your GSTIN, invoice number, HSN or SAC code, taxable value and tax.
- Charge the right tax split: CGST and SGST for customers in your own state, IGST for customers in other states.
- Apply the right GST rate per product, since rates vary by item. See our HSN codes and GST rates guide.
- Decide how you display prices: GST-inclusive (usual for consumer stores in India) or GST added on top. See GST-inclusive vs exclusive pricing.
- Keep records and file returns on time, with help from your CA.
- Handle returns properly, with credit notes where needed; see refunds and credit notes.
How does UpMinutes handle GST on your own store?
Add your GSTIN in the dashboard and every order gets a numbered GST invoice PDF with your logo, the HSN code and GST rate you set for each product, and CGST+SGST or IGST worked out from the shopper's state. Prices can be GST-inclusive or GST added on top. You can download invoices in bulk, print packing slips, and run tax reports for any dates as CSV or PDF to share with your CA.
The free GST calculator on our tools page helps you check prices, no sign-up needed. UpMinutes plans themselves include 18% GST, and you get a GST invoice for each payment, which you can add your GSTIN to.
Can you sell on both your website and marketplaces?
Yes, many businesses do. Keep these points in mind:
- Your total turnover across all channels counts for thresholds.
- Keep invoice numbering clear for each channel, so there are no duplicates.
- Reconcile marketplace TCS statements with your own records every month.
- Prices can differ by channel to cover commissions, but keep them reasonable so customers aren't surprised.
What records should you keep from day one?
Even before you register, good records make the move to GST painless and help your CA advise you properly. Keep:
- every sales invoice or order record, with the customer's state;
- purchase bills for stock, packing and services, with the supplier's GSTIN where they have one;
- payment gateway settlement reports and bank statements;
- courier bills and COD remittance statements;
- marketplace settlement and TCS statements, if you sell there;
- a running total of turnover by month, so you can see when you're approaching a threshold.
A store's sales and tax reports, downloaded each month, cover much of this. Keep the rest in one folder, physical or digital, and share it with your CA quarterly rather than all at once at year end.
Questions to take to your CA
- Do I need to register now, given my turnover, products and where my customers are?
- Does selling to other states change anything for me?
- If I also sell on a marketplace, what applies to me there?
- Should I consider the composition scheme, or is regular registration better for online selling?
- What GST rate and HSN code apply to each of my products?
- How should I treat gift cards, returns and shipping charges?
For the basics, start with GST basics for online sellers.
Frequently asked questions
Can I sell on my own website without GST registration?
Possibly, if your turnover is below the threshold and none of the other compulsory-registration conditions apply to you. Selling goods across state lines is a common reason registration may be required, so check with a CA first.
Does my payment gateway deduct TCS?
Payment gateways generally just process payments and deduct their own fees; TCS under GST is collected by e-commerce operators on sales made through their platforms. Confirm your situation with your CA.
Is the GST threshold the same for every state?
No. Thresholds differ for goods and services, and some states have lower limits. Ask your CA for the current figure that applies to your business.
Do I charge GST on delivery charges?
Delivery charges billed to the customer are often treated as part of the supply, but the treatment depends on how you sell. Ask your CA how to show them on your invoices.
