New Compliance Guidelines for E-Commerce Sellers under GST – What You Must Know
Lawgical India Business Developers Private Limited
From Incorporation to Innovation
With the rapidly growing e-commerce ecosystem in India, regulatory oversight under the Goods and Services Tax (GST) regime is also evolving. The Central Board of Indirect Taxes and Customs (CBIC) has recently rolled out new compliance guidelines specifically targeting e-commerce sellers to improve tax transparency, curb evasion, and streamline processes.
This newsletter provides a detailed overview of the new GST compliance mandates that every online seller must understand and implement immediately to avoid penalties and disruptions to their business.
Key Highlights of the New GST Guidelines
1. Mandatory GST Registration for All E-Commerce Sellers
Earlier, sellers with a turnover below ₹40 lakh (goods) or ₹20 lakh (services) could avail exemption from GST registration. However, as per the revised notification, any person selling goods or services through an e-commerce platform (like Amazon, Flipkart, Meesho, etc.) must obtain GST registration, irrespective of turnover.
Small or casual sellers are no longer exempt. Even those operating part-time or seasonally must register for GST.
2. Integration with E-Commerce Portals
GSTN (Goods and Services Tax Network) has introduced a system for real-time data sharing between e-commerce platforms and the government. Now, platforms will report the following on behalf of sellers:
Gross sales
Returns
Commission and fee deductions
Tax collected at source (TCS)
Any mismatch between your books and platform records can trigger GST scrutiny. Ensure your invoice data matches portal uploads.
3. Tax Collected at Source (TCS) Enhancements
Under Section 52 of CGST Act, e-commerce operators must collect TCS at 1% on net value of taxable supplies. The new update mandates TCS reconciliation between GSTR-8 (filed by the e-commerce platform) and GSTR-2B (auto-drafted for the seller).
Sellers must regularly reconcile GSTR-2B with platform TCS data and their own GSTR-1 & 3B returns to avoid input tax credit (ITC) mismatches.
4. Monthly Return Filing: No More Delays
The new guidelines emphasize timely return filing:
GSTR-1: Outward supplies, by the 11th of the following month.
GSTR-3B: Summary return, by the 20th (or staggered due dates depending on state).
Late fees and interest will now be automatically applied without discretion, and repeated delays may result in the suspension of GSTIN.
Automate your filing process and ensure compliance calendars are strictly followed.
5. Mandatory E-Invoicing for Sellers Above ₹5 Cr Turnover
From August 1, 2025, all e-commerce sellers with an annual turnover exceeding ₹5 crore must generate e-invoices for B2B and B2C sales. This is aimed at curbing fake invoices and increasing invoice traceability.
Ensure your billing software is integrated with the Invoice Registration Portal (IRP). Any non-compliance can invalidate your invoices, affecting ITC claims of buyers.
6. Place of Supply Clarifications
The new compliance guidelines also provide detailed clarifications on “place of supply” for intra-state vs inter-state transactions—especially for services (e.g., digital content, streaming, online courses).
Incorrect place of supply may lead to incorrect tax classification (CGST+SGST vs IGST), resulting in demand notices.
7. Penalties and Scrutiny for Non-Compliance
The updated norms provide for more stringent enforcement, including:
System-generated notices for return mismatches
Blocking of ITC under Rule 86A for suspicious or mismatched claims
GSTIN suspension for continued defaults
Even minor inconsistencies can now trigger scrutiny or audits. Sellers are advised to maintain accurate records of invoices, shipping documents, and GST returns.
8. Composition Scheme Not Available for E-Commerce
The Composition Scheme, which allows small businesses to pay GST at a concessional rate, is not applicable to e-commerce sellers, as per Rule 6(2) of the CGST Rules.
Do not opt for this scheme if you are selling through e-commerce portals, as doing so will result in invalid registration and penalties.
Best Practices to Stay Compliant
Register for GST if you haven’t already.
Reconcile GSTR-2B, GSTR-1, and GSTR-3B monthly.
Use GST-compliant invoicing tools or accounting software.
Monitor GSTR-8 and TCS deductions on platforms.
Keep digital records of all sales, returns, and fee deductions.
Stay updated on CBIC notifications and changes in rules.
Platform Responsibilities – What You Should Know
Most major platforms (Amazon, Flipkart, etc.) are updating their seller policies and dashboards to reflect these new compliance requirements. Sellers may be restricted from listing products or receiving payouts if GST details are not updated or verified.
Login to your seller dashboard and verify all GST details, PAN linkage, and e-invoicing settings.
The new GST compliance framework underscores the government’s push for greater accountability in the e-commerce sector. While the rules may appear stricter, they also bring clarity and reduce the chances of inadvertent tax violations.
By staying informed and proactive, you can turn compliance into a competitive advantage.
For further guidance or to schedule a GST compliance check for your e-commerce business, feel free to reach out to our support team.
Stay ahead of compliance and let the experts handle the rest. Partner with Lawgical India Services Pvt. Ltd. for hassle-free support in GST registration, company formation, trademark filing, FSSAI, MSME, IEC, and more. Get in touch today and make compliance your competitive edge.