The GST threshold exemption for ecommerce sellers in India is narrower than most sellers assume. The general turnover limit does not help a seller who ships goods to another State, and it does not by itself cover a seller on a collecting marketplace. This guide maps where the exemption stops, which separate exemptions exist, and how to test your own position.
Quick answer: The GST threshold exemption for ecommerce sellers applies only in defined situations. A goods seller can stay unregistered when all sales stay inside one State and turnover stays under the limit for that State, whether sold on an own website or, subject to eight conditions, through a collecting marketplace under Notification 34/2023-Central Tax. Any inter-State supply of goods generally requires registration. Facts below were read from official pages on 13 October 2026.
Why "below the threshold" is the wrong first question
Most guides begin with turnover. For online sellers, a better starting point is the type of sale: what you sell, where it goes, and through which channel. The Central Goods and Services Tax Act, 2017 sets a turnover threshold in section 22 and then overrides it in section 24 for listed categories. You can read both in the CBIC-hosted consolidated CGST Act. That copy is stated to be current as on 1 January 2022, so it must be read with later amendments, some of which are covered below.
Section 24 opens with the words "Notwithstanding anything contained in sub-section (1) of section 22". A person in a listed category must therefore register whatever the turnover. Three entries matter most for online selling: persons making any inter-State taxable supply (clause i), persons who supply goods or services through an e-commerce operator who must collect tax at source (clause ix), and the operator itself (clause x). Government can then exempt categories under section 23(2), and that power is the source of the notifications discussed in this guide.
GST replaced a range of earlier indirect taxes from 1 July 2017, as Wikipedia's GST article summarises. The result is a layered system: a rule, an override, and a set of notified exceptions to the override. Sellers who read only the first layer are the ones surprised when a marketplace asks for a GSTIN. The sections below follow the layers in order and then turn to practice: examples, a diagnostic flow, a tracking template and the mistakes to avoid.
The three layers at a glance
The table maps each layer to its legal source and to what it means for a small online seller. The sources are the Act and the notifications read for this guide, and the last column says what to match against your own facts.
| Layer | Source | What it says in substance | What to apply |
|---|---|---|---|
| 1. Base rule | Section 22(1) and Notification 10/2019-Central Tax | Registration is needed above a turnover limit; for exclusive goods suppliers the limit is notified as ₹40 lakh, with exceptions | Match your State and your goods against the exceptions list |
| 2. Override | Section 24(i), (ix), (x) | Inter-State suppliers, suppliers through collecting operators, and the operators register whatever the turnover | Match each channel you use to a clause |
| 3. Exceptions to the override | Section 23(2) notifications such as 34/2023, 65/2017, 10/2017-Integrated Tax and 3/2018-Integrated Tax | Named categories are exempt from registration if conditions are met | Every condition in the text of the notification |
| 4. Simplifications on the way | 56th and 57th GST Council decisions | Faster or simpler registration, not removal of registration | Recommendations only until notified |
The base rule: the turnover thresholds
Section 22(1) of the Act states the statutory limit of ₹20 lakh, with ₹10 lakh for special category States, and provides that the Government may raise the limit to a figure not exceeding ₹40 lakh for a supplier engaged exclusively in the supply of goods. The same section defines special category States by reference to article 279A of the Constitution, with exclusions and additions listed in the consolidated Act.
For goods, Notification 10/2019-Central Tax (dated 7 March 2019, in force from 1 April 2019) exempts a person engaged in exclusive supply of goods whose aggregate turnover in the financial year does not exceed forty lakh rupees. The notification carves out four groups: persons who must register compulsorily under section 24, persons dealing in ice cream and other edible ice, pan masala, and tobacco and manufactured tobacco substitutes, persons making intra-State supplies in ten named States and Union territories, and persons who have opted for voluntary registration or intend to continue with registration.
The CBIC's flyer on registration, hosted by the GST Council as the CBIC registration flyer, puts the same position in plain words. For goods the figure is ₹40 lakh, and ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. For services or a mix of goods and services it is ₹20 lakh, and ₹10 lakh in Manipur, Mizoram, Nagaland and Tripura.
| Kind of supplier | General limit stated by the CBIC flyer | Lower limit stated for named States |
|---|---|---|
| Exclusive supplier of goods | ₹40 lakh | ₹20 lakh in the ten States listed in Notification 10/2019 |
| Supplier of services, or goods and services mixed | ₹20 lakh | ₹10 lakh in Manipur, Mizoram, Nagaland, Tripura |
| Listed goods (ice cream, pan masala, tobacco) | No ₹40 lakh exemption under Notification 10/2019 | Not applicable |
The 56th GST Council meeting did not change the goods threshold. The official PIB FAQ on that meeting's decisions answers "Is there any change in threshold of the registration required for goods under CGST Act, 2017?" with a plain no. That is a September 2025 statement, and the 57th meeting held on 8 October 2026 did not, on the release read for this guide, alter the thresholds.
A companion guide in this series, on registration for a standalone store, gives the decision flow for these limits. This guide concentrates on what overrides them.
How aggregate turnover is counted, and why it matters online
Every threshold test uses "aggregate turnover", defined in section 2(6) of the Act. It means the aggregate value of all taxable supplies (excluding inward supplies on which the recipient pays tax under reverse charge), exempt supplies, exports and inter-State supplies of persons having the same Permanent Account Number, computed on an all-India basis, and it excludes the taxes themselves. The explanation to section 22 adds that it includes supplies made on the person's own account or on behalf of principals.
For an online seller three consequences follow. First, all channels are added together: your own website, a marketplace, an Instagram order that is invoiced, and walk-in sales from a shop. Second, the test is by PAN and all India, so a seller with stock in two States does not get a separate threshold per State. Third, exempt supplies and exports count too. The Act itself, not a platform dashboard, defines the figure, and a marketplace dashboard shows only the sales made on that marketplace. The PAN is issued under the Income-tax Act; the Income Tax Department's e-filing portal is the official source for PAN services, and Wikipedia's PAN article gives background on the number.
Where the exemption stops, part one: inter-State supplies of goods
Section 24(i) catches "persons making any inter-State taxable supply". The CBIC flyer explains that a supplier who sells outside his State must register irrespective of the size of his turnover, with relaxations for handicraft goods, services and job work. For services, Notification 10/2017-Integrated Tax, dated 13 October 2017, exempts inter-State suppliers of taxable services whose all-India aggregate turnover does not exceed ₹20 lakh (₹10 lakh for special category States other than Jammu and Kashmir). No equivalent general exemption exists for ordinary goods.
This matters because online selling usually means delivery everywhere. A seller whose goods turnover is ₹8 lakh and who ships one parcel to another State has made an inter-State supply, and on the text of section 24(i) that supply requires registration. The threshold, in practice, protects the goods seller who restricts deliveries to a single State. For the commercial side of moving from social selling to a store, see the ShopMate comparison Instagram selling versus an online store; the point here is only that a delivery pincode can be a legal trigger.
Where the exemption stops, part two: collecting marketplaces and the operator itself
Suppliers through a collecting operator
Section 24(ix) covers persons who supply goods or services, other than the supplies in section 9(5), through an e-commerce operator who is required to collect tax at source under section 52. Section 52(1) requires the operator to collect an amount at a notified rate, not exceeding one per cent, of the net value of taxable supplies made through it by others, where the operator collects the consideration. Section 2(45) defines an e-commerce operator as any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce.
The GST Council's hosted CBIC FAQ on TCS states that every person supplying goods through such an operator must register irrespective of the value of supply, under section 24(ix). That FAQ also records the services exception described below. Its rate figures predate a 2024 change, so use it for the registration logic only.
The rate was reduced from 1 per cent to 0.5 per cent (0.25 per cent CGST plus 0.25 per cent SGST or UTGST, or 0.5 per cent IGST) by Notification 15/2024-Central Tax, dated 10 July 2024, which substitutes "0.25 per cent." for "half per cent." in the earlier rate notification. The Ministry of Finance's year-end review on PIB records the combined position in those terms.
Own website versus marketplace
The registration flyer also says that TCS shall not apply where a person supplies his own product through his own website. A seller with both a marketplace presence and an own store is therefore treated differently on each channel: TCS and the section 24(ix) override attach to the marketplace sales, and not to the website sales as such. The threshold for the business is still computed across all channels, as the previous section explained.
The operator itself
Section 24(x) requires every e-commerce operator who must collect tax at source to register, with no turnover limit, and the TCS FAQ says so in terms. For a seller this matters in one way only. If you build a platform that lists other sellers and collects payment on their behalf, you may become an operator, with registration, collection and statement duties under section 52. A store that sells only its own stock is not an operator for this purpose; a store that opens a marketplace section for other merchants and collects their payments is a different business, with the section 24(x) and section 52 duties.
How a notification can override section 24: the legal plumbing
A reader may ask how a section 23(2) notification can exempt someone whom section 24 says must register "notwithstanding" section 22. The Act as printed in the 2022 consolidated copy does not settle that by itself, and the GST Council's knowledge-resource summary of the Finance Bill 2023 records the answer: it explains that the existing section 23 had no clause overriding sections 22(1) and 24, so a doubt arose whether compulsory registration prevails over a section 23 exemption, and it proposes to make section 23(1) operate notwithstanding sections 22(1) and 24, retrospectively from 1 July 2017.
That document is a summary of the Bill. Its own table of changes lists "Section 23 made overriding to Section 22 and Sec 24", which states the intention. For a seller, the practical takeaway is simple. The exemption under Notification 34/2023, in force from 1 October 2023, rests on this override; if your facts fall outside its conditions you are back under section 24(ix).
The GST threshold exemption for ecommerce sellers that does exist
Government has used section 23(2) to create several exemptions for sellers who would otherwise be caught. Each has its own conditions and none is general.
Services through an operator: Notification 65/2017-Central Tax
This notification, dated 15 November 2017, exempts persons supplying services (other than those under section 9(5), where the operator pays the tax) through a collecting operator, if their all-India aggregate turnover does not exceed ₹20 lakh in a financial year, with the proviso of ₹10 lakh for special category States other than Jammu and Kashmir. The text is in the GST Council copy of Notification 65/2017.
Goods through an operator: Notification 34/2023-Central Tax
For goods, Notification 34/2023-Central Tax, dated 31 July 2023 and in force from 1 October 2023, exempts persons supplying goods through a collecting operator whose aggregate turnover in the preceding and the current financial year does not exceed the section 22(1) amount above which a supplier in that State or Union territory is liable to register, subject to eight conditions. The next section sets them out.
Handicrafts and craftsmen
The CBIC flyer records an exemption for inter-State suppliers of specified handicraft goods until they cross the threshold. The relevant instrument is Notification 3/2018-Integrated Tax, dated 22 October 2018, which a copy of the notification reproduces: it covers handicraft goods as defined in the explanation to Notification 21/2018-Central Tax (Rate), and a table of products made by craftsmen predominantly by hand, each with HSN codes.
Exempt goods and job work
Section 23(1)(a) provides that a person engaged exclusively in supplying goods or services that are not liable to tax or are wholly exempt need not register. The flyer also notes relief for small job workers supplying services. These are category rules rather than ecommerce rules, and they apply only if the whole business fits the category.
Notification 34/2023, condition by condition
The eight conditions in the notification are cumulative: failing one takes the seller outside the exemption. The table restates each in plain words with the practical test and the trap that catches online sellers.
| Condition | Plain meaning | Practical test | Typical trap |
|---|---|---|---|
| (i) No inter-State supply of goods | The text reads "shall not make any inter-State supply of goods" | Check delivery States on every channel | The wording is not limited to marketplace orders, so an own-website order to another State falls within it |
| (ii) One State or Union territory only | No supply through operators in more than one State or UT | List the States on every marketplace account | Opening stock or a second seller account in another State |
| (iii) PAN | A PAN under the Income-tax Act is required | Keep PAN details consistent across platforms | Using a different person's PAN |
| (iv) Prior declaration | Declare PAN, place of business address and State on the common portal before supplying, subject to validation | Complete the portal enrolment before the first sale | Starting sales while the declaration is pending |
| (v) Enrolment number | An enrolment number must be granted after validation | Save the enrolment confirmation | Treating a submitted form as an enrolment number |
| (vi) One enrolment per State | Not more than one enrolment number in a State or UT | Use one declaration per State | Duplicate declarations for the same PAN |
| (vii) No supply before enrolment | No supply through an operator until the number is granted | Do not list before approval | Listing products during onboarding |
| (viii) Cessation on registration | If you later register under section 25 the enrolment number ceases from the effective date | Update the marketplace with your GSTIN | Continuing to use the enrolment number after registering |
The notification also states the turnover test: aggregate turnover in the preceding financial year and in the current financial year must not exceed the section 22(1) amount for the State. That is a two-year look, so a seller who crossed the limit last year cannot rely on a quiet start to this one.
Enrolment versus registration: what changes in practice
Enrolment under Notification 34/2023 is not registration. The enrolled seller has no GSTIN, issues no tax invoice and does not file returns, because the person is exempt from obtaining registration. Taxmann's secondary summary of the GSTN update dated 12 October 2023 says the portal functionality for enrolling unregistered persons who supply goods through operators in one State or Union territory became available. The portal's own steps are on the GST portal and its registration tutorials.
| Question | Unregistered, own website only | Enrolled under 34/2023 | Registered under section 25 |
|---|---|---|---|
| Has a GSTIN | No | No; has an enrolment number | Yes |
| May sell inter-State | No, for goods, subject to the notified exceptions | No, by condition (i) | Yes |
| May sell through collecting marketplaces | Subject to the platform's rules | In one State, if all conditions are met | Yes |
| May collect GST from customers | No | No | Yes, on a tax invoice |
| May claim input tax credit | No | No | Yes, subject to the Act |
| Files periodic returns | No | No | Yes |
The right to collect tax and to claim input tax credit is the reason many small sellers choose to register voluntarily even where they are exempt. The CBIC flyer lists the advantages in these terms: legal recognition as a supplier, authority to collect tax, the ability to pass on credit and to claim credit on purchases.
What TCS does and does not do for a small seller
Section 52(1) defines "net value of taxable supplies" as the aggregate value of taxable supplies made during a month by all registered persons through the operator, less the supplies returned. The CBIC FAQ restates this as a supply by a registered supplier, and draws the inference itself for unregistered service suppliers: because they are not liable to register, operators need not collect TCS on their services.
For a registered seller the mechanics are clearer. The operator pays the amount collected to the Government within ten days after the end of the month and files a monthly statement (section 52(3) and (4)). The supplier then claims credit of the amount in his electronic cash ledger (section 52(7)). It is a credit, not a final cost, but it ties up working capital until the supplier uses it against tax due, which is why the lower 2024 rate was welcomed. A separate guide in this series, on TCS and TDS credits for marketplace sellers, covers statement reading.
Scenarios table: who must register anyway
The table applies the sources above to assumed sellers. The seller descriptions and figures are invented for illustration, and every row assumes the goods are ordinary taxable goods not on the exceptions list.
| Assumed seller | Channel | Position under the sources |
|---|---|---|
| 1: Goods seller, ₹18 lakh turnover, delivers only inside its State | Own website only | Below ₹40 lakh and no override applies; registration not required (State list and excluded goods still to be checked) |
| 2: Same seller, accepts an order for another State | Own website | Inter-State supply of goods; registration required under section 24(i) |
| 3: Goods seller, ₹12 lakh, lists on a collecting marketplace, sells only within its home State | Marketplace | Section 24(ix) would apply; Notification 34/2023 enrolment may avoid full registration if all conditions are met |
| 4: Same seller, receives an order for a second State | Marketplace | Outside the 34/2023 exemption (inter-State supply, more than one State); registration required |
| 5: Online tutor, ₹15 lakh, sells courses through a collecting platform | Marketplace, services | Notification 65/2017 can exempt up to ₹20 lakh if conditions are met |
| 6: Goods seller on a marketplace and own site, ₹30 lakh combined, one State | Both | Aggregate turnover is combined across channels; the 34/2023 test uses aggregate turnover; check the State's threshold |
| 7: Business supplying only exempt goods | Any | Section 23(1)(a): not liable to register if supplying only goods that are not taxable or wholly exempt |
| 8: Business launching a multi-seller marketplace | Operator | Section 24(x): registration required regardless of turnover where tax collection at source applies |
| 9: Goods seller in Telangana, ₹22 lakh, sells only inside the State on own website | Own website | Telangana is among the ten States for which Notification 10/2019 excludes intra-State supplies from the ₹40 lakh exemption, so the ₹20 lakh limit applies and registration is needed |
Row 6 deserves emphasis. Section 2(6) counts all supplies under the same PAN, so a seller cannot split turnover between a marketplace account and an own store to stay under a limit. If the combined figure is above the threshold, the exemption is not available on either channel.
Worked example 1: combined turnover crossing the limit (assumed figures)
Assume a goods-only seller in Karnataka, which is not on the ten-State list, so the ₹40 lakh exemption is the relevant limit. Between April and mid-December the seller records the following taxable sales, with every figure assumed and excluding GST.
| Channel | Sales to date (₹ lakh) |
|---|---|
| Own website, inside Karnataka | 9.5 |
| Collecting marketplace, inside Karnataka | 14.2 |
| Walk-in shop sales | 7.8 |
| Total to date | 31.5 |
The total is 9.5 + 14.2 + 7.8 = 31.5, which is below ₹40 lakh, so on these facts the seller is still within the general exemption and, for the marketplace, within the enrolment route. A festival month then adds ₹9.1 lakh across the channels, so the new total is 31.5 + 9.1 = 40.6, which is above ₹40 lakh. From the day the running total crosses the limit, the seller is liable to register, and section 25(1) requires the application within thirty days from the date on which liability arises. If the crossing happens on 14 December 2026, thirty days later is 13 January 2027. The enrolment number under Notification 34/2023 stops being a safe basis for selling once the turnover condition is not met, so the seller should not wait for the next financial year. A seller who looks only at the marketplace dashboard sees ₹14.2 lakh and concludes there is headroom; the test is the combined figure by PAN.
Worked example 2: a lower limit in a named State (assumed figures)
Assume a goods-only seller in Hyderabad, Telangana. Because Telangana appears in Notification 10/2019's list of ten States, the limit for intra-State goods supplies is ₹20 lakh rather than ₹40 lakh, as the CBIC flyer also records. The seller's assumed sales to date are in the table.
| Channel | Sales to date (₹ lakh) |
|---|---|
| Own website, inside Telangana | 6.4 |
| Collecting marketplace, inside Telangana | 8.9 |
| Walk-in sales at a weekend stall | 5.9 |
| Total to date | 21.2 |
The total is 6.4 + 8.9 + 5.9 = 21.2, which exceeds ₹20 lakh by 1.2 lakh (21.2 minus 20.0). A seller who assumed the ₹40 lakh figure would believe there was another 18.8 lakh of headroom (40.0 minus 21.2), when in fact the limit has already been passed.
Worked example 3: what registration adds on a marketplace (assumed figures)
Assume a registered seller whose taxable supplies through a collecting marketplace in one month total ₹2,00,000 excluding GST, with taxable supplies returned by customers of ₹12,000 in the same month. Net value of taxable supplies is 2,00,000 minus 12,000, which is ₹1,88,000. At the 0.5 per cent combined rate the operator collects 1,88,000 × 0.005 = ₹940. For an intra-State sale the notified split is half each: ₹470 as 0.25 per cent CGST and ₹470 as 0.25 per cent SGST; for an inter-State sale the whole ₹940 is IGST.
The seller then sees ₹940 as a credit in the electronic cash ledger once it is reflected in the operator's statement (section 52(7)). Without registration that line would not exist, because nothing would be matched to a GSTIN.
Illustrative scenarios: three sellers walked through
Illustrative scenario: a home-textile seller in Surat
A seller of cushion covers, assumed to have ₹16 lakh annual turnover, begins on a marketplace and sells only to Gujarat customers. She works through the diagnostic flow below, finds that all conditions of Notification 34/2023 are met, and enrols. Six months later a customer in Rajasthan asks for a bulk order through her own site. That is an inter-State supply of goods. She cannot take it as an unregistered person, so she has two choices: decline the order, or apply for registration before accepting it. She applies, receives a GSTIN, informs the marketplace so the enrolment number ceases to be used (condition viii), and then accepts the order on a tax invoice.
Illustrative scenario: a block-print craftsman in Jaipur
A craftsman sells hand-block-printed stoles. Assume the goods fall within the notified handicraft description and the HSN code is in the table in Notification 3/2018-Integrated Tax. If so, he may make inter-State supplies without registration until the threshold, provided the conditions on PAN and e-way bill generation in the notification are met. The moment he lists on a marketplace that collects tax, section 24(ix) and Notification 34/2023 come into play, and the 34/2023 condition against inter-State supply is not satisfied by his inter-State sales. He therefore has to register for that channel, because condition (i) of 34/2023 is not met.
Illustrative scenario: an online tutor in Pune
A tutor sells recorded lessons through a collecting platform and has ₹15 lakh of turnover. Services supplied through an operator fall under Notification 65/2017, which exempts up to ₹20 lakh on an all-India basis, so she does not need to register for that channel. Three months later a second income stream, a consulting contract, takes her total to ₹21.5 lakh (15.0 + 6.5). The all-India aggregate now exceeds ₹20 lakh and registration is required; she should not wait for the year end.
A diagnostic flow for any online seller
- Is any sale of goods leaving your State, from any channel? If yes, the inter-State rule in section 24(i) applies and you generally register, unless a handicraft or other notified exception fits.
- Do you sell through a marketplace that collects payment and therefore collects tax at source? If it only lists and does not collect, section 24(ix) is not triggered.
- Are you supplying goods or services? Services: test Notification 65/2017. Goods: test Notification 34/2023.
- Do you sell through operators in more than one State or Union territory? If yes, register.
- Is combined turnover by PAN, over both the preceding and the current year, within the limit for your State, remembering the ten-State list and the goods listed in Notification 10/2019? If no, register.
- If you pass every test, declare PAN, place of business and State on the common portal, and wait for the enrolment number before the first sale through the operator.
The marketplace publishes its own onboarding requirements on its seller pages, and an operator may ask for a registration number even where the law would not.
A tracking template and a message to send the marketplace
A sheet with the following columns, updated on the first working day of each month, answers most threshold questions. Use your books as the source, not only platform dashboards.
| Column | What to record | Why it matters |
|---|---|---|
| Month and channel | Own website, each marketplace, offline, other | Aggregate turnover covers all channels by PAN |
| Taxable sales ex-GST | Value before tax | The Act's measure excludes taxes |
| Exempt sales and exports | Value, even if zero | They are part of aggregate turnover |
| Delivery States | Every State to which an order shipped | Any inter-State goods supply is a trigger |
| Running total, this year and last | Cumulative figure | The 34/2023 test looks at both years |
| Headroom to the State limit | Limit minus running total | Early warning before a strong month |
| Notification version and date read | Number and date you checked | Shows what you relied on |
When you contact a marketplace, keep the message short and specific. A suitable outline is: your legal name and PAN; the State you ship from; whether you sell goods or services; a statement that all deliveries are within that State; the enrolment number, if you have one; and a request for the list of documents the platform needs from an enrolled but unregistered seller. Keep the reply, the enrolment confirmation and a note of the notification versions you relied on, so you can show later how you reached your conclusion.
What the platform does with your details, and the cost of getting it wrong
Operators that collect tax furnish a monthly statement of supplies, and the details are matched against what suppliers report (section 52(8) to (11)). Where the operator's figure for a supplier exceeds the figure the supplier reported, the difference not rectified in time is added to the supplier's output tax liability in the following month's return, with the tax payable along with interest. This is one reason registration is expected of sellers on collecting platforms: the system relies on a GSTIN to match.
The Act also treats failure to obtain registration as a default that can attract a penalty. Section 122(1) lists "fails to obtain registration" among them, and a supplier who should have been registered may also face tax and interest on the supplies made. The 57th Council meeting recommended, as the PIB release of 8 October 2026 sets out, reducing the maximum general penalty under section 125 from ₹25,000 to ₹10,000, a minimum threshold of ₹10,000 for issuing show cause notices, and raising the prosecution threshold. Those are recommendations that become law only through notifications and amendments. A seller who realises late that a limit was crossed should apply at once and record the date liability arose.
Recent changes and recommendations to watch
Two Council meetings have touched registration for small sellers. The table lists what the official releases say and the status of each item as read on 13 October 2026.
| Item | What the official release says | Status to check |
|---|---|---|
| Optional simplified registration, 56th meeting | Automated registration within three working days for low-risk applicants, and applicants who assess their output tax on supplies to registered persons at not more than ₹2.5 lakh per month; said to be operationalised from 1 November 2025 | The 57th release says automatic registrations are being granted under rule 14A of the CGST Rules |
| In-principle approval, small suppliers through operators across States | 56th meeting approved the concept; modalities to come back to the Council | Followed up at the 57th meeting |
| Proposed rule 14B, 57th meeting (8 October 2026) | Registration by declaring the operator's warehouse as principal place of business, for small suppliers of goods in States where they have no physical presence and expect to pass on input tax credit of not more than ₹2.5 lakh per month; granted automatically, subject to conditions | A recommendation; the release says it takes effect through circulars, notifications and amendments |
The sources are the PIB release on the 56th meeting and the PIB release on the 57th meeting linked in the previous section. Neither removes the requirement to register; both aim to make it simpler. A seller should not plan around rule 14B until it is notified, and if notified it would sit alongside the single-State enrolment route in Notification 34/2023 rather than replace it.
Mistakes sellers make with threshold exemptions
- Assuming the ₹40 lakh limit applies to marketplace sales without checking section 24(ix) and Notification 34/2023. Consequence: selling through a marketplace without registration or valid enrolment.
- Looking up a generic table and missing the State list in Notification 10/2019, as in worked example 2. Consequence: believing there is headroom when the limit is already passed.
- Enrolling under 34/2023 and later accepting an out-of-State order from the own website. Consequence: a possible breach of condition (i).
- Selling through more than one State on a marketplace while holding only an enrolment number. Consequence: outside the exemption by condition (ii).
- Splitting turnover across family members or entities under different PANs. The law counts turnover by PAN, but arrangements designed to avoid registration attract scrutiny.
- Using a third-party blog's threshold table instead of the notification. Consequence: working from outdated or incomplete figures.
- Forgetting that listed goods are outside the ₹40 lakh exemption. Consequence: assuming an exemption that Notification 10/2019 withholds.
- Continuing to use an enrolment number after obtaining registration. Condition (viii) says it ceases from the effective date of registration.
- Treating a Council recommendation as law. The 57th meeting release says its decisions take effect only through circulars, notifications and amendments.
Checklists before you list on a marketplace and when you cross a limit
Before listing on a marketplace
- Identify every channel that adds to your aggregate turnover, including offline sales.
- Decide whether you are supplying goods, services or both.
- List the States to which you will ship, from every channel.
- Match your State against the ten-State list and the excluded goods in Notification 10/2019.
- Read the conditions in Notification 34/2023 (goods) or 65/2017 (services).
- Download the marketplace's seller onboarding document list for sellers who are enrolled but not registered.
- Keep a dated record of the turnover test you applied.
When you are close to, or past, a limit
- Update the tracker from your books and not only from dashboards.
- Diary the thirty-day window in section 25(1) from the date liability arose.
- Gather PAN, address proof, bank details and business documents before you apply on the GST portal.
- Tell each marketplace your GSTIN once granted, and stop using any enrolment number.
- Set up your own-store invoice template to show GST, as described in the ShopMate guide to GST invoices for an online store.
For the wider picture of selling beyond marketplaces, see the ShopMate articles GST compliance for ecommerce sellers in India and how to sell across all India. Sibling guides in this series cover registration for a standalone store, HSN codes and TCS and TDS statements.
Frequently asked questions
Does the ₹40 lakh limit apply if I sell only on a marketplace?
Not by itself. Section 24(ix) requires registration for suppliers through a collecting operator irrespective of turnover. Notification 34/2023 gives a separate exemption for goods sellers who meet its conditions, including intra-State supply only, one State only and a validated enrolment, and its turnover test uses the section 22(1) amount for the State, which may be lower than ₹40 lakh.
Can I sell on a marketplace and my own site with one enrolment number?
Only if every condition holds. The notification prohibits any inter-State supply of goods and supply through operators in more than one State, and turnover from all channels is combined. If your own website ships to other States, the exemption is lost on the wording of condition (i), which bars any inter-State supply of goods.
Do service providers on platforms need registration?
Under Notification 65/2017, suppliers of services (other than section 9(5) services) through a collecting operator are exempt if all-India aggregate turnover does not exceed ₹20 lakh, or ₹10 lakh for special category States other than Jammu and Kashmir. Above the limit, or where the services fall under section 9(5), different rules apply and registration may be required.
Is an e-commerce operator ever exempt on turnover grounds?
No. Section 24(x) requires every operator that must collect tax at source to register, and the CBIC FAQ states that registration is mandatory irrespective of the value of supply. A business that operates only its own store and does not collect payments for other sellers is not an operator in this sense.
Does selling inter-State from my own website always need registration?
For goods, section 24(i) makes inter-State taxable supply a ground for compulsory registration irrespective of turnover, with notified relaxations such as handicrafts under Notification 3/2018-Integrated Tax. For services, Notification 10/2017-Integrated Tax exempts small inter-State suppliers up to the stated limits. Goods fall under the handicraft relief only if they match an entry in its table.
What happens if I should have registered and did not?
Consequences can include tax, interest and penalties under the Act, and section 122(1) names failure to obtain registration among the defaults. The 57th Council meeting recommended lighter penalties in some cases, and those recommendations take effect only through notifications and amendments. The sound course is to apply for registration at once.
Will the simplified scheme for small marketplace sellers change this?
If notified as recommended, proposed rule 14B could ease registration for small sellers in States where they have no presence, using the operator's warehouse as principal place of business. It would simplify how you register, not remove the need to register. The release states that recommendations take effect only when notified, so watch for the actual rule text.
How do I know the thresholds have not changed?
Read the notification itself, not a summary. The PIB FAQ on the 56th meeting said there was no change in the goods registration threshold, and the 57th release read for this guide did not alter it. Notifications are listed on the CBIC GST site at cbic-gst.gov.in and the Council's own site at gstcouncil.gov.in.
Can I register voluntarily even though I am below the limit?
Yes. The CBIC flyer states that small businesses below the threshold can opt to register voluntarily, and Notification 10/2019 itself refers to persons exercising the option under section 25(3). Voluntary registration brings the ability to collect tax and claim credit, and also return filing duties, so weigh both before applying.
Check your GST threshold exemption for ecommerce sellers before you sell online
If you are comparing marketplaces with an own branded store, the team can walk you through how GST invoicing and tax display work in ShopMate, which does not replace a tax review. Book a session at theshopmate.com/contact#demo, see the one-plan structure on the pricing page, or read more about ShopMate.
Disclaimer: This article is for general information only and is not legal, tax or financial advice. ShopMate is the publisher of this guide and has a commercial interest in the platform it describes. Rules, thresholds, fees and platform terms change, and your situation may differ. Consult a qualified chartered accountant or legal professional before making decisions.