{"id":1229,"date":"2026-04-13T12:55:30","date_gmt":"2026-04-13T12:55:30","guid":{"rendered":"https:\/\/indiacorporates.com\/blog\/?p=1229"},"modified":"2026-04-13T12:55:31","modified_gmt":"2026-04-13T12:55:31","slug":"gst-threshold-rule-for-e-commerce-sellers","status":"publish","type":"post","link":"https:\/\/indiacorporates.com\/blog\/gst-threshold-rule-for-e-commerce-sellers\/","title":{"rendered":"ONDC vs Amazon: Why the \u20b920 Lakh GST Threshold Doesn\u2019t Apply to E-commerce Sellers"},"content":{"rendered":"\n

If you sell products online whether on Amazon India, Flipkart, Meesho or ONDC (Open Network for Digital Commerce) there is one GST rule that catches most new sellers completely off guard that is \u20b920 lakh exemption threshold does not apply to you.<\/p>\n\n\n\n

For regular offline businesses in India, GST registration threshold<\/a> is \u20b920 lakh per year in most states (\u20b910 lakh in special category states) and those below this number don\u2019t need to register or collect GST legally.<\/p>\n\n\n\n

But for e-commerce sellers, this exemption does not exist even after the changes in GST from 1 April 2026.<\/a> It doesn\u2019t matter if you earn \u20b950,000 a month or \u20b95,000. The moment you list your product on any online marketplace, GST registration becomes mandatory. This is one of the most misunderstood aspects of GST for online sellers in India, and it applies equally if you\u2019re selling on private platform like Amazon or on public network like ONDC.<\/p>\n\n\n\n

What is \u20b920 lakh GST Threshold and why it doesn\u2019t cover online sellers<\/h2>\n\n\n\n

The GST Threshold (GST registration limit) for small businesses was introduced to give relief to small enterprises. If your annual turnover is below \u20b920 lakh or (\u20b940 lakh for goods-only businesses in regular states since 2019), you can operate without registration under GST. This is for our neighbourhood kirana store, local tailor, small town service provider.<\/p>\n\n\n\n

But Section 24 of CGST Act, 2017<\/em> creates specific rules for e-commerce sellers. This act creates list of certain categories of businesses that have compulsory GST registration, and turnover does not matter. E-commerce operations and suppliers who sell through them fall under this mandatory registration category.<\/p>\n\n\n\n

The Law:<\/strong>
Section 24(ix) of the CGST Act states that any person who supplies goods or services through an e-commerce operator is required to obtain GST registration. There is no minimum turnover bar for this category. It is unconditional. <\/p>\n\n\n\n

This means if you\u2019re selling single handmade candle set on Amazon Handmade or listing your cloud kitchen on Swiggy Minis via ONDC, you need GSTIN<\/a> before you receive your first payment.<\/p>\n\n\n\n

ONDC vs Amazon: Does the Platform Matter for GST Rules?<\/h2>\n\n\n\n

This is where many sellers get confused. They assume that since ONDC<\/a> is government-backed open network unlike Amazon<\/a> or Flipkart<\/a> which are private companies, it may be have different or friendlier GST rules. This assumption is incorrect.<\/p>\n\n\n\n

The GST rules for e-commerce sellers is not depends on who owns or operates platform. It is depends on nature of transaction. If you sell goods or services through any online platform that connects buyers and sellers, you must register under GST. Even though ONDC is an open network, it is still an e-commerce system under GST rules.<\/p>\n\n\n\n

Feature<\/strong><\/td>Amazon \/ Flipkart (Private Platforms)<\/strong><\/td>ONDC (Open Network)<\/strong><\/td><\/tr>
Platform type<\/strong><\/td>Private marketplace<\/td>Government-backed open network<\/td><\/tr>
GST registration mandatory?<\/strong><\/td>Yes, always<\/td>Yes, always<\/td><\/tr>
\u20b920 lakh GST threshold applies?<\/strong><\/td>No<\/td>No<\/td><\/tr>
TCS deducted by platform?<\/strong><\/td>Yes \u2014 1% (0.5% CGST + 0.5% SGST)<\/td>Yes \u2014 via buyer-side app (BAP)<\/td><\/tr>
Who collects TCS?<\/strong><\/td>Amazon\/Flipkart directly<\/td>Buyer App Operator (BAP) on ONDC<\/td><\/tr>
GSTR-8 filing required?<\/strong><\/td>Filed by operator (Amazon\/Flipkart)<\/td>Filed by buyer-side app operator<\/td><\/tr>
Seller claims TCS credit?<\/strong><\/td>Yes, via GSTR-2A\/2B<\/td>Yes, same process<\/td><\/tr>
Composition scheme available?<\/strong><\/td>No \u2014 e-commerce sellers ineligible<\/td>No \u2014 same restriction<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

From GST compliance perspective, selling on ONDC is same as selling on Amazon. The rules are same for things like compulsory registration, TCS deduction, and not being allowed to use composition scheme.<\/p>\n\n\n\n

It donen\u2019t matter if you sell through Amazon, Meesho or ONDC. if you\u2019re using an online marketplace, GST registration<\/a> is compulsory even if you earn \u20b91.<\/p>\n\n\n\n

What Is TCS and How Does It Affect E-commerce Sellers?<\/strong><\/h2>\n\n\n\n

One of unique aspects of GST for e-commerce sellers is Tax collected at source (TCS). Under Section 52 of CGST Act<\/em>, every e-commerce operator like Amazon, Flipkart or buyer-side app on ONDC is required to collect 1% GST as TCS before sending payments to sellers.\u00a0<\/p>\n\n\n\n

If you sell product worth \u20b910,000 on Amazon, the platform will deduct \u20b9100 as TCS (0.5% CGST + 0.5% SGST) and pay you \u20b99.9000. Platform then deposits this \u20b9100 with government and files monthly GSTR-8 return mentioning your GSTIN and amount deducted. You can then claim this \u20b9100 as credit in your own GSTR-3B\u00a0<\/p>\n\n\n\n

TCS on ONDC- who collects it?<\/strong>
ON ONDC, Buyer App Provider (BAP) for example, Paytm, Magicpin, acting as buyer app is responsible for deducting and depositing TCS. The seller app (SAP) you use to list your products does not collect TCS. This is important because it decides in whose GSTR-8 your TCS credit will show up.<\/p>\n\n\n\n

For you as seller, process of claiming TCS credit in GST is same across all platforms: check your GSTR-2A\/2B for TCS entries filed by operator and claim credit in your GSTR-3B under \u201cTDS\/TCS credit received\u201d. This is real cash flow consideration TCS is deducted from every payment and you need to actively claim it back.<\/p>\n\n\n\n

Why E-commerce Sellers Cannot Use the GST Composition Scheme<\/strong><\/h2>\n\n\n\n

The GST Composition Scheme is another tax relief measure that small businesses love. Under this scheme, eligible businesses can pay GST at lower fixed rate (around 1-6% depending on type of business) and file simpler quarterly returns. This makes compliance much easier. <\/p>\n\n\n\n

However, Section 10 of CGST Act states that businesses that sell through any e-commerce platform cannot choose this scheme. If you sell goods or services online you are not eligible, with no exceptions. This rule applies to all platforms, including ONDC-based apps like Dunzo, Blinkit (partner sellers) or any other seller app connected to ONDC.\u00a0<\/p>\n\n\n\n

Why this matters for your business<\/strong>
Without access to GST Composition Scheme, online sellers file monthly or quarterly GST returns<\/a> (GSTR-1 and GSTR-3B) maintain detailed invoice records, reconcile TCS credits and comply with full range of regular GST obligations. This creates extra administrative work, especially for new sellers or small business owners.<\/p>\n\n\n\n

Step-by-Step: How to Register for GST as an Online Seller<\/strong><\/h2>\n\n\n\n

Getting GST registration as an online seller involves detailed, step-by-step process on government portal. You need to gather multiple documents, fill out forms carefully, upload everything correctly, complete verification, and then wait for approval. It can be time-consuming and sometimes confusing especially if you\u2019re doing it for the first time.<\/p>\n\n\n\n

Instead of going through all this hassle, you can simply get help from Indiacoporates professional service provider. Just share your basic documents, and their experts will handle the entire process for you from application to approval so you receive your GST certificate<\/a> without stress.<\/p>\n\n\n\n

And it doesn\u2019t stop at registration. You also get ongoing support like GST return filing<\/a>, compliance management, and other related services, making it much easier to run your business smoothly.<\/p>\n\n\n\n

ONDC and the Future of E-commerce GST Compliance in India<\/strong><\/h2>\n\n\n\n

ONDC (open network for digital commerce) is Indian government\u2019s ambitious initiative to make e-commerce more open and accessible. Instead of being tied to just one platform, sellers can list their products once and be visible across many buyer apps like Paytm, PhonePe, and Magicpin. The goal is to give small businesses, kirana stores, local artisans and MSMEs fair chance to compete with bigger, platform-driven businesses.\u00a0<\/p>\n\n\n\n

But this openness creates new challenge for GST compliance on ONDC. because multiple buyer apps are involved in single transaction and each BAP is responsible for TCS, seller could theoretically appear in GSTR-8 filings from multiple operations in same month and reconciliation becomes more complex. <\/p>\n\n\n\n

Government has been working on clearer GST usidelines specifically for ONDC based transactions, particularly around inter-state sales, place of supply determination and how returns like GSTR-1 should handle ONDC-specific invoice formats.<\/p>\n\n\n\n

Penalties for Non-Compliance: What Happens If You Don’t Register?<\/strong><\/h2>\n\n\n\n

If you don\u2019t register for GST and avoid paying tax, you may have to pay a penalty equal to the tax amount. For example, if your GST due is \u20b950,000, you will have to pay an extra \u20b950,000 as penalty along with the original tax.<\/p>\n\n\n\n