GST Compliance Gets Easier
The GST framework for small online sellers could undergo significant changes, with the GST Council considering measures aimed at expanding their reach while reducing registration and compliance burdens.
Under the proposed arrangement, small sellers may be allowed to use e-commerce warehouses as their registered place of business in states where they do not have their own premises. At present, sellers supplying goods across several states generally need separate registrations and compliance arrangements.
A key proposal involves allowing sellers to complete physical verification and Aadhaar authentication in a single state. Registration in other states could then follow with the consent of the e-commerce platform, without requiring direct intervention from tax officers.
The move could benefit a large base of small sellers. Around 1.05 million sellers currently supply goods through platforms, of which nearly 950,000, or about 90%, have very little input tax credit for their buyers.
The proposed framework could allow these sellers to reach customers across the country without establishing separate business premises in every state. However, e-commerce platforms would take on greater compliance responsibilities, including answering queries, reporting seller information and sharing verified data with tax authorities.
Platforms may also be required to report when sellers are removed from their systems or when their business details change.
The GST Council had earlier cleared a simplified registration mechanism for small e-commerce suppliers at its 56th meeting in September 2025. Tax experts believe the latest proposals could further reduce compliance costs while maintaining verification and platform-level reporting safeguards.
Another proposal could bring greater uniformity in GST treatment of deliveries arranged through e-commerce platforms. The Council is also examining who should bear GST liability for services booked through online platforms, with the possibility of making liability dependent on the nature of the service rather than the platform’s commercial model.
The broader objective is to make India’s digital commerce ecosystem more accessible to small businesses while ensuring stronger tax compliance.
