The GST Council is likely to consider a proposal at its October 7 meeting to allow small businesses selling goods exclusively through e-commerce platforms to operate with a single GST registration, in a move aimed at simplifying compliance for small online sellers.
The proposed scheme is expected to be optional and would primarily benefit small suppliers who have little or no physical presence across multiple States or Union Territories but sell their goods through e-commerce operators (ECOs) that collect tax at source.
Under the proposed framework, a supplier would need to have a physical presence in at least one State or Union Territory, which would be treated as the supplier’s principal place of business (PpoB). The supplier could then use the single GST registration for its e-commerce operations, subject to the conditions prescribed under the scheme.
The proposal seeks to address a key compliance difficulty faced by small online sellers. At present, businesses may have to obtain separate GST registrations in different States in certain situations, particularly when their goods are stored in warehouses or fulfilment centres located across States.
The proposed mechanism could allow eligible sellers to use e-commerce platforms without having to obtain multiple GST registrations merely because their inventory is stored in warehouses in different States.
The move is expected to reduce the compliance burden and administrative costs for small suppliers and make it easier for them to access national e-commerce markets.
The proposal is likely to be examined by the GST Council at its meeting on October 7, along with other measures aimed at simplifying GST compliance and improving ease of doing business. Final details, including eligibility criteria, operational conditions and safeguards, would depend on the Council’s decision.