Nearly every week, a client walks into our office in Vidyadhar Nagar with the same story — they started selling on Amazon or Flipkart without registering for GST, assuming the usual ₹40 lakh threshold gave them time. By the time they reach us, the marketplace has already suspended their listing, or worse, tax has been demanded on sales made without a valid GSTIN. In fifteen years of GST practice, this is the single most common and most avoidable mistake we see among new online sellers.
This guide walks through exactly when GST registration is mandatory for e-commerce sellers, the documents and process involved, and what changes once you’re registered and selling live.
Why the Usual Turnover Threshold Does Not Apply
Under the regular GST rules, a business only needs to register once turnover crosses ₹40 lakh for goods or ₹20 lakh for services. Sellers on Amazon, Flipkart, Meesho, Myntra, or any similar marketplace do not get this benefit.
Section 24 of the CGST Act specifically overrides the exemption limit for anyone supplying goods or services through an e-commerce operator. This means registration is required from your very first sale, regardless of how small the transaction is. Selling ₹500 worth of goods on Amazon on day one of your business already puts you within the mandatory registration bracket.
There is one narrow exception worth knowing. If you sell exclusively to buyers within your own state (no inter-state shipping at all) and your turnover stays below the regular threshold, recent GST notifications allow certain small and composition-scheme sellers some relief from mandatory registration on specific platforms. In practice, this exception rarely helps a growing Jaipur seller, since most marketplace orders ship across state lines within the first few weeks of listing. We recommend treating registration as compulsory unless your CA has specifically confirmed you qualify for this narrow carve-out.
Documents Required for Registration
Before starting the application, keep the following ready:
- PAN card of the business owner or entity
- Aadhaar card, with the linked mobile number active for OTP verification
- Passport-size photograph
- Proof of business address — electricity bill, rent agreement with NOC, or property ownership document
- Marketplace seller agreement or onboarding confirmation, if the marketplace requests it during scrutiny
If you are registering as a proprietorship, which is how most first-time online sellers start out, the process is faster since there is no separate constitution document to upload.
Step-by-Step GST Registration Process in India
1. File Part A of the application on the GST portal using your PAN, mobile number, and email. This generates a Temporary Reference Number (TRN).
2. Complete Part B using the TRN — business details, principal place of business, details of the promoter/partner, and the bank account.
3. Select “Supplier of Goods” or “Supplier of Services” as applicable, and under “Reason for Registration,” choose the option covering mandatory registration for persons supplying through an e-commerce operator. Selecting the wrong reason here is one of the most common causes of delay.
4. Upload the documents listed above in the prescribed format and size.
5. Aadhaar authentication — most applications now require this step; without it, the application moves to compulsory physical or virtual verification, which extends the timeline.
6. Verification by the GST officer. If everything is in order, approval typically comes through in 3 to 7 working days. If your application is flagged for physical verification of the business address, it can take 15 to 20 days.
7 .GSTIN issued, after which you register this number on your marketplace seller dashboard to activate live selling.
We handle the entire filing on behalf of clients, including responding to any query raised by the officer, which is where most delays actually happen.
Understanding TCS Deducted by the Marketplace
Once you’re live, every marketplace you sell on is required to deduct Tax Collected at Source (TCS) at 0.5% of the net taxable value of your sales (0.25% CGST + 0.25% SGST for intra-state sales, or 0.5% IGST for inter-state sales) under Section 52 of the CGST Act. This is deducted automatically before the marketplace pays you, and deposited with the government.
This is not an extra cost to you — it is an advance tax credit. The marketplace reports it through their own return (GSTR-8), and it reflects in your GSTR-2B and electronic cash ledger, from where you can adjust it against your monthly GST liability. The mistake we see most often is sellers ignoring this credit entirely and paying their full GST liability in cash, effectively double-paying tax that was already collected on their behalf. Reconciling TCS against your GSTR-2B every month prevents this.
Common Reasons Applications Get Rejected or Delayed
- Business address proof not matching the name on the application
- Selecting the standard registration reason instead of the e-commerce-specific one
- Aadhaar authentication skipped or mismatched with PAN details
Most of these are avoidable with a careful first submission — a rejected application means starting the entire process again, which typically costs sellers two to three weeks of lost selling time on a fast-growing listing.
What Changes After GST Registration
Registration is the starting point, not the end of compliance. Once active, you are required to file GSTR-1 (outward supply details) and GSTR-3B (summary return and tax payment) every month, and GSTR-9 annually once your turnover crosses the applicable threshold. You must also issue GST-compliant invoices with the correct HSN codes on every sale, even when the marketplace generates the customer-facing invoice on your behalf.
We recommend a monthly reconciliation between your marketplace sales report, the TCS reflected in GSTR-2B, and your own GSTR-1 filing. Left unreconciled for a few months, small mismatches compound into GST notices that take considerably longer to resolve than the twenty minutes a monthly check would have taken.
How AGAR & CO. CA Firm Can Help
We manage end-to-end GST registration for e-commerce sellers across Jaipur, including selecting the correct registration category so your application isn’t delayed by an avoidable error. Once registered, our team also handles ongoing GST return filing and monthly TCS reconciliation, so credits from your marketplace sales are never left unclaimed. For sellers who’ve already received a mismatch notice or a scrutiny query, our GST advisory team responds the same day.
If you’re planning to start selling on Amazon, Flipkart, or Meesho, get registered before your first listing goes live — WhatsApp us your PAN and address proof, and we’ll have your GSTIN application filed within the day.
