New GST registration route allows online sellers to expand using ecommerce warehouses as local bases
Starting November 1, small online sellers will have a new option for GST registration. They can use ecommerce warehouses as local bases in other states, promoting nationwide sales. This initiative is part of a broader effort to simplify regulations and reduce expansion costs for small traders. Eligible sellers must meet specific conditions, including tax liability limits and operator consent.
As of November 1, small online sellers in India will be able to expand their reach across the country by using ecommerce warehouse facilities as their local base for GST registration, according to a new route announced by the Central Board of Indirect Taxes and Customs (CBIC). This simplification of GST registration rules aims to reduce expansion costs for small manufacturers and traders who sell through online marketplaces, while also making it easier for ecommerce platforms to onboard new sellers.
Under the new arrangement, eligible sellers who are already registered in their home state can collect tax at source in other states by leveraging the ecommerce warehouse. However, this facility comes with conditions such as obtaining the ecommerce operator's consent, meeting verification requirements, and maintaining a monthly output tax liability limit of ₹2.5 lakh. Additionally, the new registration route does not exempt sellers from other GST obligations, including invoicing, return filing, and tax payment.
The revised tax rules also cover scrap purchases, hospitality services, fertilisers, and retreaded tyres. Furthermore, access to refunds for exporters has been made easier, and e-invoicing requirements have been expanded from January. The CBIC's decision to implement these changes follows a directive from the 57th GST Council meeting to alleviate the challenges faced by small manufacturers and traders in expanding their businesses through online platforms.
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