Today in this Guide we are learning about GST Registration for Ecommerce Seller. If you are just starting your Ecommerce Business on Amazon or Flipkart or through own website then this Guide is very helpful for you. GST Registration is Essential Legal Registration specially for Ecommerce Business.
GST Registration For E-Commerce Sellers
The first thing that comes to our mind,what is the first step of an e-com seller :
First of all, a legal entity has to be selected, so there are five types of legal entities in India.
- First is the Proprietorship firm,in which 90% of the e-commerce sellers are registered because you do not have to form a separate legal entity under it.You can directly apply for GST and whatever your PAN card number is, a GST number is issued on that number.
- In a Partnership firm, there is a requirement of two partners and here a separate PAN card is made and GST will be issued on it.
- Even in a Private limited company, a minimum of 2 persons are required and in this also a separate PAN card is made and a GST number is issued separately.
- In Limited Liability Partnership Company also there is requirement of two persons and separate PAN card is made and GST number will be issued on the same.
- In a one person company (OPC), there is a requirement of one person, but the PAN card is issued separately and GST is issued on the same.
Is GST registration mandatory for E-Commerce?
Yes, it is mandatory for all e-commerce operators to get themselves registered under GST without any expectations of the sales turnover.Therefore, operators are required to get registered under GST before starting business as an e-commerce operator or it is necessary to register within 30 days of starting a business.
As per Section 24 of the CGST Act, all the e-commerce companies must obtain GST registration mandatorily but it is compulsory for certain persons to register under GST even if their aggregate turnover is less than the applicable concession limit.
E-Commerce GST Registration Limit
If you want to register as an e-commerce seller, and if your annual turnover exceeds the prescribed limit then you will have to register under GST. The limit for most states is Rs 40 lakh for supply of goods and for some north-eastern states it is Rs 20 lakh and for supply of services it is ₹20 lakh.
Section 22(1) of the Central Goods and Services Tax Act, provides for registration of a supplier of goods and services having an aggregate turnover of more than Rs 20 lakh and hence every supplier whose turnover exceeds Rs 20 lakh must need to be registered.
Section 23 says that the person who is not liable for registration.
- Any person who is solely engaged in the business of supply of goods or services or both which is not liable to pay tax or a person who is wholly exempted from tax under this Act or under the Integrated Goods and Services Tax Act.
- An agriculturist is exempted from paying tax to the extent of the supply of produce from the cultivation of the land.
Documents Required for E-commerce GST
Now we will talk about the documents which are necessary for GST registration.
- First of all, a personal PAN card will be required.
- Aadhar card and it should be linked to the mobile number.
- Passport size photograph required.
- There should be business address proof. If it is a residential property and owns property, then the NOC( No Objection Certificate) certificate on stamp paper will have to be attached along with the electricity bill.
- And if it is a rented property, then you can create a rent agreement and get NOC created from the person in whose name the electricity bill comes.
- After this the legal business name will have to be chosen.For example (ABC Enterprise), you can select different brand names separately and also apply for a trademark.
- The advantage of having a different business name is that you will be able to run multiple brand names under one business name.
- Apart from this, whatever product you are going to sell on the e-commerce site, you will have to find out the HSN ((Harmonised System of Nomenclature) code in advance.
GST registration Procedure for e-commerce sellers
For online registration we have to follow these four steps.
Step 1 – Have to apply on the GST portal.
Step 2 – Then ARN no. i.e. tracking number will be generated and after that the Government Officer will give approval.
Step 3 – After approval, user ID and password will be generated.
Step 4 – After logging in, you will have to simply download the GST certificate then you can proceed to sign up on the e-commerce site.
What is the GST tax rate for e-commerce?
As we know, E-commerce portals charge commission from different types of suppliers and it is subject to GST at the rate of 18%.
Section 9(5) of the CGST Act provides that the government has to specify the service categories for which an e-commerce operator is liable to accumulate and pay GST as if they were providing a service.These provisions are applicable only to e-commerce operators and not to those persons who are selling the services via them.
In the case of e-commerce,GST has changed the taxation system of business. This tax assessment process has been made more transparent and resistance-free. Be sure to note whether you are required to collect GST and pay membership fees or not.