Selling Through E-Commerce Platforms

A shop that starts selling on a marketplace takes on a different set of GST rules from the same shop selling over the counter. The registration threshold can stop applying. The operator deducts an amount from every settlement, and the seller recovers it only by acting on the portal. For some services the seller does not pay the tax at all, because the platform pays it instead. And a seller with stock in an operator’s warehouse in another State may find it has a place of business there. Since October 2023 the answers also depend on whether the seller sells goods or services and whether it is registered, under composition or not registered at all.

This guide sets out those rules from the seller’s side. How the operator registers is in Registering as an E-Commerce Operator Collecting TCS, and how it reports is in TDS and TCS Returns: GSTR-7 and GSTR-8.

Five kinds of seller, five sets of rules

Seller	Registration	Who pays the tax	TCS by the operator	Inter-State sales
Registered normal taxpayer, goods or services	Compulsory, whatever the turnover (s.24(ix))	The seller	Collected	Allowed
Supplier of services within the threshold	Exempt (Notification No. 65/2017-Central Tax)	The seller, if it registers	Not applicable while unregistered	Not covered by the exemption
Supplier of goods within the threshold, with an enrolment number	Exempt (Notification No. 34/2023-Central Tax)	No tax: the seller is not registered	Not collected (Notification No. 37/2023-Central Tax)	Not allowed
Composition taxpayer selling goods	Registered under section 10	The seller, at the composition rate	Collected (Notification No. 36/2023-Central Tax)	Not allowed
Supplier of a service notified under section 9(5)	Depends on the service (below)	The operator	Not collected	As the operator’s supply

Each row is explained below.

Why registration is compulsory: section 24(ix)

Section 24 of the CGST Act requires certain persons to register “notwithstanding anything contained in sub-section (1) of section 22”, that is, whatever their turnover. Clause (ix) covers:

“persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52”

Two limits are built into those words. The operator must be one that collects tax at source, and the seller’s supplies must not be ones on which the operator itself pays tax under section 9(5).

The ordinary threshold exemptions do not reach this case. Notification No. 10/2019-Central Tax, which lifts the threshold to forty lakh rupees for suppliers of goods only, expressly excludes “persons required to take compulsory registration under section 24”. A seller covered by clause (ix) is relieved only by a notification made for e-commerce sellers.

Services within the threshold: Notification No. 65/2017

Notification No. 65/2017-Central Tax exempts from registration persons supplying services through a TCS-collecting operator, “other than supplies specified under sub-section (5) of section 9”, whose aggregate turnover, “computed on all India basis”, does not exceed twenty lakh rupees in a financial year. The limit is ten lakh rupees in the special category States as specified in the notification. The exemption covers registration only. A service provider that registers anyway is a registered person, and TCS is collected on its supplies.

Goods within the threshold: enrolment under Notification No. 34/2023

From 1 October 2023, Notification No. 34/2023-Central Tax exempts persons supplying goods through a TCS-collecting operator whose aggregate turnover “in the preceding financial year and in the current financial year” does not exceed the amount above which section 22(1) requires registration. Section 22(1) sets that amount at twenty lakh rupees, or ten lakh rupees in a special category State. The forty-lakh limit for goods does not apply here, because it comes from Notification No. 10/2019, which is a separate exemption.

The exemption has eight conditions. The seller:

1. makes no inter-State supply of goods
2. does not sell through an operator in more than one State or Union territory
3. holds a PAN
4. declares, before its first sale, its PAN, the address of its place of business and the State in which it will sell, on the common portal, for validation
5. has been granted an enrolment number on successful validation of the PAN
6. holds no more than one enrolment number in a State
7. makes no supply through an operator until it has the enrolment number
8. loses the enrolment number from the effective date of any later registration under section 25

A GSTN advisory of 12 October 2023 describes the route on the portal. The applicant opens User Services, chooses “Generate User Id for Unregistered Applicant”, confirms the warning, ticks “To apply as a supplier to e commerce operators” and fills in the form. The enrolment number is generated once the PAN is validated.

The operator’s side is in Notification No. 37/2023-Central Tax. It must allow the supply “only if enrolment number has been allotted”, allow no inter-State supply, collect no TCS, and report the supplies in FORM GSTR-8. Section 122(1B) backs this up with a penalty on the operator, not the seller. The penalty is ten thousand rupees, or the tax that would have been due on a registered seller’s supply, whichever is higher. It applies where the operator allows a supply by an unregistered person not exempted by notification, allows an inter-State supply by a person not eligible to make one, or misreports an exempted person’s supply in its statement.

An enrolled seller is not a registered person. It charges no tax, files no return and has no credit. Its sales still count towards the threshold, and once its turnover crosses it, the exemption no longer applies.

Composition sellers: goods only, and only within the State

Until 30 September 2023, section 10(2)(d) barred a composition taxpayer from supplying “goods or services” through a TCS-collecting operator. Section 137 of the Finance Act, 2023 omitted the words “goods or” from clause (d) of section 10(2) and from clause © of section 10(2A), with effect from 1 October 2023 (Notification No. 28/2023-Central Tax). A composition taxpayer may now sell goods through an operator. Supplying services through one still makes the person ineligible, under both sub-sections.

Notification No. 36/2023-Central Tax sets the operator’s procedure for these sellers. It must not allow them any inter-State supply of goods, must collect TCS on their supplies and must report them in GSTR-8. The seller pays tax at the composition rate through FORM CMP-08 and can use the TCS credited to its cash ledger towards that payment. The composition returns are in Composition Returns: CMP-08 and GSTR-4, and the option itself in Opting In and Out of the Composition Scheme.

Services on which the operator pays the tax: section 9(5)

Section 9(5) lets the Government notify services whose tax “shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax”. The list is in Notification No. 17/2017-Central Tax (Rate), as amended by Notifications 23/2017, 17/2021, 16/2023, 08/2025 and 17/2025. As it stands today, it covers:

• passenger transport by radio-taxi, motorcab, maxicab, motor cycle “or any other motor vehicle except omnibus”
• passenger transport by omnibus, “except where the person supplying such service through electronic commerce operator is a company” (from 20 October 2023)
• accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes
• housekeeping, such as plumbing and carpentering
• restaurant service, other than services supplied by restaurants located at “specified premises” (from 1 January 2022). Since 1 April 2025 the term carries the meaning in Notification No. 11/2017-Central Tax (Rate).
• local delivery (from 22 September 2025, inserted by Notification No. 17/2025-Central Tax (Rate))

The condition that matters most to a seller is attached to accommodation, housekeeping and local delivery. The operator pays “except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22”. The test is whether the seller is liable to register on turnover, not whether it is in fact registered. A guest house with turnover above the threshold charges and pays its own tax even when it is booked through a platform. One below the threshold leaves the tax to the operator. Passenger transport (other than by bus) and restaurant service carry no such condition, so the operator pays the tax whatever the supplier’s size. For local delivery, the rate entry in Notification No. 11/2017-Central Tax (Rate), as substituted by Notification No. 15/2025-Central Tax (Rate), is nine per cent central tax both for deliveries through an operator by a person not liable to register and for other local deliveries.

For section 9(5) supplies, the operator is treated as the supplier. The seller does not charge tax on them. The operator does not collect TCS on them either, because the Explanation to section 52(1) leaves “services notified under sub-section (5) of section 9” out of the net value on which TCS is calculated.

The supplies are still the seller’s for other purposes. CBIC’s Circular No. 167/23/2021-GST says that a restaurant’s aggregate turnover “shall include the aggregate value of supplies made by the restaurant through ECOs”. The instructions to GSTR-1 say that section 9(5) supplies “shall not be included under exempted supplies of supplier”.

The Delhi High Court has upheld the use of section 9(5) to tax platform bookings that would be exempt if made offline. In Uber India Systems Pvt Ltd v Union of India (Delhi HC, 12 April 2023, W.P.© 14048/2021 and connected matters), the operators and an auto-rickshaw drivers’ union challenged Notifications 16/2021 and 17/2021-Central Tax (Rate). From 1 January 2022, those notifications withdrew the exemption for auto-rickshaw rides and non-air-conditioned stage carriage tickets booked through an operator, while keeping it for the same rides booked offline. The Court held that the notifications “do not create an unreasonable classification on the basis of the ‘mode of booking’”, are not violative of Articles 14, 19(1)(g) and 21, and were within the powers in sections 9(5) and 11. It dismissed the petitions. No appeal outcome was found in the sources searched.

The 57th GST Council meeting on 8 October 2026 recommended bringing “delivery services, other than courier and postal” supplied through an operator under section 9(5), at five per cent without input tax credit, where the supplier is not liable to register under section 22(1). It also recommended amending section 9(5) itself to settle the operator’s liability “irrespective of the business models being followed by him”. Both are recommended, not yet notified. The same meeting’s simplified registration for small sellers is described under place of business below.

The TCS, and getting it back

On supplies that are neither enrolled-seller supplies nor section 9(5) supplies, the operator collects tax at source. Section 52(1) sets the base: “the net value of taxable supplies”, meaning the month’s taxable supplies by registered persons through the operator less supplies returned. The rate is 0.25 per cent central tax plus 0.25 per cent State tax on intra-State supplies (Notification No. 52/2018-Central Tax, as amended by Notification No. 15/2024-Central Tax). On inter-State supplies it is 0.5 per cent integrated tax (Notification No. 02/2018-Integrated Tax, as amended by Notification No. 01/2024-Integrated Tax). These rates apply from 10 July 2024. Before that date the total was one per cent.

The TCS is not a payment of the seller’s tax. The seller still pays its full liability through GSTR-3B. Section 52(7) lets it “claim credit, in his electronic cash ledger”, of the amount collected and reflected in the operator’s statement. On the portal, the claim is made in the “TDS and TCS Credit Received” statement. The seller accepts or rejects each row, files the statement, and the accepted amount is credited to the cash ledger “only after filing”. Since April 2025 the rows carry a place of supply, so one operator can appear several times in a month. The steps, and what happens to a rejected row, are in TDS and TCS in Practice. Once credited, the balance pays any tax, interest or penalty, or can be claimed as a refund: see Refund of Excess Balance in the Cash Ledger.

The operator’s figures are also checked against the seller’s. Section 52(8) requires them to be matched, and rule 78 names the fields: the “State of place of supply” and the “net taxable value”, as declared in GSTR-8 and in the seller’s GSTR-1, as amended in GSTR-1A. Under section 52(10) and (11), where the operator reports more than the seller and the discrepancy is not rectified, the difference is added to the seller’s output tax with interest.

Invoices

A registered seller issues its own tax invoice to the buyer under section 31 and rule 46, on supplies on which it pays tax. For a section 9(5) service, the operator is the person liable “as if he is the supplier” and invoices accordingly. Rule 46(f) has a proviso for these sales. Where “any taxable service is supplied by or through an electronic commerce operator … to a recipient who is un-registered, irrespective of the value of such supply”, the invoice must contain “the name of the state of the recipient”, and that is “deemed to be the address on record of the recipient”. The State matters because it fixes the place of supply, and so whether central and State tax or integrated tax is charged: see Place of Supply.

Returns: tables 14 and 15 of GSTR-1

Notification No. 26/2022-Central Tax added two tables to GSTR-1 for e-commerce.

• Table 14 is the seller’s. Row 14(a) reports “supplies on which e-commerce operator is liable to collect tax u/s 52”, and row 14(b) reports supplies on which the operator “is liable to pay tax u/s 9(5)”. Each row is given per operator GSTIN, with the net value and the tax. The form’s instructions say supplies in 14(a) are details “of the supplies reported in any table from 4 to 10”. They are therefore reported twice: once in the ordinary B2B or B2C table, and once in table 14. For 14(b), “Tax on such supplies shall be paid by the ECO and not by the supplier”. Table 14A amends earlier periods.
• Table 15 is the operator’s. It reports section 9(5) supplies by supplier and recipient type, with document details where the recipient is registered. Table 15A amends it. A seller does not fill table 15.

The instructions to tables 4A and 4B add that section 9(5) supplies “shall not be reported” there. In GSTR-3B, the portal’s manual says row 3.1.1(ii) takes only “the Total Taxable Values” of the seller’s section 9(5) supplies, auto-populated from table 14(b). The tax goes in row 3.1.1(i) of the operator’s return. The filing steps are in Filing GSTR-1, and Correcting It in GSTR-1A and Filing GSTR-3B and Paying the Tax. The portal’s GSTR-1 FAQ says exempt supplies through an operator are reported “in a consolidated manner in table 14 or 14A”.

Place of business on the platform

Registration is State-wise. Section 25(1) requires registration “in every such State or Union territory in which he is so liable”. A seller whose goods sit in an operator’s fulfilment centre in another State supplies from that State, and the compulsory registration under section 24(ix) attaches there too. The Act expects such warehouses to be on the seller’s registration. Section 52(12)(b) lets an officer demand from the operator details of stock held by sellers “in the godowns or warehouses … managed by such operator and declared as additional places of business by such suppliers”. Adding a place of business is an amendment under rule 19: see Amending a Registration.

The 57th Council recommended a new rule 14B in the CGST Rules. It would give small sellers of goods through operators a system-granted registration in States where they have no physical presence, by “declaring the warehouse of an ECO in that State/UT, as their Principal Place of Business”. It would apply where the seller intends to pass on input tax credit of no more than Rs 2,50,000 a month. That too is recommended, not yet notified. The existing simplified route under rule 14A, in force from 1 November 2025, is a general option for applicants under rule 8 whose output tax on supplies to registered persons is within Rs 2,50,000 a month. It is not specific to e-commerce.

What to have ready

• Turnover for the current and preceding financial years, all-India, from the books. This decides whether Notification 65/2017 or 34/2023 can apply.
• The nature of each product line: goods, ordinary services or section 9(5) services. This comes from the seller’s catalogue and the operator’s category.
• The States where stock is held, from the operator’s fulfilment reports.
• The operator’s settlement reports: gross sales, returns and TCS by operator GSTIN and place of supply. These feed tables 4 to 7 and table 14.
• The “TDS and TCS Credit Received” rows for the month, from the portal, compared with the settlement reports.

Consequences, and what can be put right

A seller that should be registered but is not is outside the exemption notifications, and the ordinary consequences of non-registration follow. These include assessment under section 63, covered in Assessment of Unregistered Persons. A registered seller whose GSTR-1 under-reports against the operator’s statement faces an addition to output tax under section 52(10).

Several things can be put right. A wrong table 14 entry is amended in table 14A of a later GSTR-1, within the time limit in section 37(3). A wrong TCS row is rejected in the credit statement and comes back after the operator amends it. An enrolled seller that wants to sell inter-State, or in a second State, must first register. The limits on correcting returns are in Correcting Mistakes in Returns.

The procedure in summary

1. Classify each line of business. Goods, ordinary services and section 9(5) services follow different rules.
2. For section 9(5) services, check whether the seller is liable to register under section 22(1). For accommodation, housekeeping and local delivery, that decides whether the operator or the seller pays.
3. For other supplies, register under section 24(ix) in each State the seller supplies from, including States where the operator holds its stock. Or, if every condition is met, rely on Notification 65/2017 (services) or obtain an enrolment number under Notification 34/2023 (goods, one State, no inter-State sales).
4. A composition taxpayer may sell goods, but not services, through an operator, and only within its State.
5. Issue invoices showing the buyer’s State for unregistered buyers of services, and leave section 9(5) supplies to the operator’s invoice.
6. Report platform sales in the ordinary GSTR-1 tables and again in table 14(a), and section 9(5) supplies in table 14(b) only. Reconcile with the operator’s GSTR-8 by State and net value.
7. Each month, accept or reject the TCS rows in “TDS and TCS Credit Received” and file the statement, so that the credit reaches the cash ledger.

The next guide covers the other side of the same mechanism: deduction by government buyers and collection by operators, and how a supplier claims the credit.