1 hr ago
GST Panel May Ease Rules for Small E-Commerce Sellers
Small sellers often need a business address in every state where they sell online.
A proposed rule would let them use an e-commerce platform’s warehouse address in states where they do not have their own premises.
They would first be checked in one state, then could register in other states with the platform’s approval.
The platform would have to share seller information and report important changes.
The GST Council had approved this simpler approach in principle in September 2025, but detailed rules were still to follow.
Other proposals would set a standard tax rate for platform deliveries and clarify who pays GST for services booked online.
Platforms would also file a monthly report even if they collected no tax.
Another proposal would treat the outright sale of intellectual property as a service.
A proposal would let small online sellers use a platform’s warehouse as their business address in states where they lack premises.
Sellers would complete physical verification and Aadhaar authentication in one state, with registrations elsewhere possible with platform consent and no tax-officer involvement.
Platforms would share verified seller information, identify a person responsible for it, and report seller removals or changed details.
Other proposals would set a 5% GST without input tax credit for platform delivery, clarify GST liability for platform-booked services, and require monthly collection statements even when nil.
An outright sale of intellectual property would be classified as a service, matching the treatment of licensing.
- Who
- The GST Council, small e-commerce sellers, and e-commerce platforms.
- What
- The Council may consider proposals on seller registration, delivery and service GST, platform reporting, and intellectual-property classification.
- Where
- India, with provisions concerning seller registration across states.
- When
- The simplified registration mechanism was cleared in principle at the Council’s 56th meeting in September 2025; the proposals may be taken up afterward.
- Why
- To reduce compliance burdens for small sellers and clarify or standardize GST treatment for platform-based transactions.
Proposed changes
Current arrangements or concerns
Small-seller registration
Proposed changes
Allow sellers to use a platform warehouse address and register across states after verification in one state, reducing the need for premises and registrations in every state.
Current arrangements or concerns
Under current rules, sellers supplying goods across states through a platform need a registered place of business in each state supplied; the proposal would also make platforms responsible for specified information and reporting.
GST liability for platform-booked services
Proposed changes
Make liability depend on the service itself, giving platforms clarity regardless of their commercial model.
Current arrangements or concerns
The current provision fixes liability on platforms for certain notified services, but platforms using different commercial models have interpreted it differently; some say subscription or recharge arrangements make them technology providers while fares go directly to driver-partners.
Key facts
- Small sellers using platforms
- About 1.05 million sellers supply goods through e-commerce platforms.
- Low input tax credit
- Around 950,000 sellers, or 90%, pass on very little input tax credit to buyers.
- Verification
- The proposed route requires physical verification and Aadhaar authentication in one state.
- Registration elsewhere
- Other-state registrations would follow with platform consent and without tax-officer involvement at the registration stage.
- Delivery proposal
- A uniform 5% GST without input tax credit is proposed for platform-based delivery of goods.
- Monthly statements
- Platforms would file monthly collection statements even when no tax was collected; nil statements would carry no late fee.
- Intellectual property
- An outright sale of intellectual property would be treated as a service.
Sources
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