GST ACT SIMPLIFIED SERIES

Selling online comes with a distinct set of GST rules compared to a traditional brick-and-mortar business — starting with the fact that the usual turnover-based registration exemption often doesn't apply. This guide explains registration requirements, TCS obligations, and the special liability rules that apply to platforms like food-delivery and cab-aggregator apps.

Who is an E-commerce Operator?

Under Section 2(45) of the CGST Act, an e-commerce operator is any person who owns, operates, or manages a digital or electronic facility or platform for electronic commerce — this covers online marketplaces (like Amazon or Flipkart), food-delivery apps, cab-aggregator platforms, and similar digital platforms that facilitate the supply of goods or services between third-party sellers/service providers and customers.

Registration Rules for Sellers on E-commerce Platforms

Persons supplying goods or services through an e-commerce operator are generally required to register for GST compulsorily under Section 24, without the benefit of the usual ₹40 lakh / ₹20 lakh turnover exemption that applies to businesses selling directly.

A specific relaxation now exists, however, allowing small suppliers of goods (not services) to sell through e-commerce operators within their home state (intra-state supply only) without mandatory registration, provided they meet certain conditions and remain below the applicable turnover threshold — this relaxation does not extend to inter-state supply through e-commerce platforms.

TCS Collection Obligation

E-commerce operators must collect TCS at 0.5% on the net value of taxable supplies made through their platform by other suppliers, deposit it with the government, and file GSTR-8 monthly (covered in detail in our TDS & TCS blog). This applies regardless of the seller's own registration status under the relaxation mentioned above, in most cases.

Section 9(5) — Operator Deemed as the Supplier

For certain specified categories of services notified by the government, the e-commerce operator itself is made liable to pay GST as if it were the actual supplier of that service, rather than the individual driver, host, or restaurant using the platform. This shifts GST compliance responsibility from often numerous, small, and dispersed individual service providers onto the platform itself.

•      Passenger transportation services by a radio-taxi, motor cab, maxi cab, or motorcycle through such platforms (e.g., app-based cab aggregators)

•      Accommodation services supplied through such platforms by unregistered hosts (e.g., certain platforms facilitating short-stay accommodation)

•      Restaurant services supplied through food-delivery e-commerce platforms (with some carve-outs where the restaurant itself is registered and supplies from a specified premises)

•      Housekeeping services (such as plumbing or carpentry) supplied through such platforms by unregistered service providers

Practical Compliance Checklist for Online Sellers

•      Register for GST before starting to sell through any e-commerce platform (unless covered under the limited intra-state goods relaxation)

•      Track TCS credited by each platform against your own GSTR-8-linked records to ensure it matches

•      Reconcile platform-reported sales data against your own GSTR-1 filings, since discrepancies are a common source of notices

•      Understand whether any of your services fall under Section 9(5), in which case the platform — not you — bears the GST payment responsibility for that specific service

Frequently Asked Questions

Q1. Do all sellers on e-commerce platforms need GST registration?

A. In most cases, yes, mandatorily — regardless of turnover — though a conditional relaxation exists for small intra-state suppliers of goods (not services) selling through notified e-commerce platforms, subject to specific conditions.

Q2. Who pays GST when I book a cab or order food through an app?

A. For notified services under Section 9(5), the e-commerce operator (the app/platform) itself is liable to pay GST to the government, rather than the individual driver or restaurant, simplifying compliance for a large number of small, dispersed service providers.

Q3. What return does an e-commerce operator need to file for TCS?

A. Form GSTR-8, filed monthly, reporting details of supplies made through the platform by registered sellers and the TCS collected on those supplies.

Q4. Does the intra-state goods relaxation apply to service providers too?

A. No, this specific relaxation from mandatory registration is limited to suppliers of goods making intra-state supplies through e-commerce platforms; service providers selling through e-commerce platforms generally still require mandatory registration regardless of turnover.

Q5. If a restaurant is already GST-registered, does Section 9(5) still shift liability to the food-delivery platform?

A. This depends on the specific notification and the nature of the restaurant's registration and premises — certain registered restaurants supplying from specified premises may retain their own liability rather than the platform, so the exact applicability should be checked against the current notification.

Q6. Can an e-commerce operator itself sell products directly, in addition to hosting third-party sellers?

A. Yes, but for its own direct sales (as opposed to facilitating third-party sales), the operator is simply a regular supplier subject to normal GST rules — the TCS collection obligation specifically applies only to supplies made by other sellers through its platform.