GST registration for small e-commerce sellers to get easier from November 1

There is good news for small shopkeepers and those running micro, small and medium enterprises. The Centre has taken a major decision that will make Goods and Services Tax (GST) registration easier for small e-commerce sellers. The new process will begin on November 1. It was approved at the recent 57th GST Council meeting.

At an event of the Associated Chambers of Commerce and Industry of India (ASSOCHAM), an official, speaking on condition of anonymity, said all the system changes needed for easier registration have been completed. According to the official, the facility will be available on the GST portal from the beginning of next month.

What exactly is the new rule? The Council has proposed a simple and voluntary registration process under Rule 14B of the Central Goods and Services Tax (CGST) Rules, 2017. Under this arrangement, small sellers who sell goods on e-commerce sites will be able to register in other states as well. For this, they will have to declare the e-commerce platform's warehouse as their principal place of business. They will not need to open a separate office or shop in those states.

Earlier, if a seller wanted to keep goods in warehouses in other states through Amazon or Flipkart, the seller had to furnish proof of an actual office in that state. That condition has now been removed. The old rule meant problems such as renting offices in other states, paying electricity bills and drawing up rent agreements. Under the new rule, sellers will be able to keep their goods at the fulfilment centres or warehouses of Amazon or Flipkart and deliver faster to customers in other states.

Small e-commerce operators with annual turnover below Rs 20 lakh will also get relief. Under the new rule, they will be exempt from the collection of TCS and will get the full benefit of the GST threshold. This means that just as a small offline shopkeeper pays no tax on turnover up to Rs 20 lakh, online sellers will now get the same facility. With no tax deduction, they will have more money in hand for their day-to-day business.