How to Do GST Registration for an E-Commerce Business?
GST has benefited e-commerce businesses in India by simplifying taxation, reducing compliance burdens, and eliminating the cascading effect of taxes. This has led to improved competitiveness, lower costs, and increased transparency. GST has also boosted e-commerce growth by allowing businesses to expand and invest more.
The Input Tax Credit (ITC) mechanism lets businesses claim credit for GST paid on inputs, reducing their overall tax burden. GST online portal and real-time tracking system have made it challenging for businesses to evade taxes, ensuring a level playing field.
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Who Needs to Register for GST in E-commerce?
In India, e-commerce businesses must register for GST if they meet certain criteria. The specific thresholds and requirements may vary, but here are some general guidelines:
Annual Turnover
If a business’s annual turnover exceeds the threshold set by the government (currently ₹40 lakhs for most states), it must register for GST. Even if the business’s turnover is below the threshold, it may be required to register if it provides products or services interstate.
Type of Business
- Online Marketplaces: If a business operates an online marketplace, it is generally required to register for GST, regardless of its annual turnover.
- Third-party Sellers: Sellers who sell goods or services through online marketplaces must also register for GST if their annual turnover exceeds the threshold or if they are engaged in interstate supply.
- E-commerce Operators Supplying Through an Agent: E-commerce operators who supply goods or services through an agent are required to register for GST, regardless of their annual turnover.
- OIDAR (Online Information and Database Access or Retrieval) Services: Businesses providing OIDAR services must also register for GST, regardless of their annual turnover.
Supply of Goods or Services
If a business supplies goods or services electronically, it is likely required to register for GST. This includes businesses that sell digital products, online courses, or other intangible services. Also, if businesses want to claim Input Tax Credit (ITC) on the GST paid on their purchases, they need to be registered for GST.
What Documents are Required for GST Registration?
The following documents are required for online GST registration:
- Photo of Applicant
- Proof of Professional Address (Any) of the below:
- Any other certificate or document issued by the Government
- Any other Certificate or record from the government
- Consent Letter
- Electricity Bill
- Legal ownership document
- Municipal Khata Copy
- Property Tax Receipt
- Rent / Lease Agreement
- Rent receipt with NOC (In case of expired/no agreement)
- SEZ Approval Order
- Proof of qualifying degree
- Proof of designation of the post held at the time of retirement (It is applicable for Retired Govt Officials only)
- Pension Certificate used by AG Office or LPC
Step-by-Step Guide to GST Registration
Follow the steps for a successful GST registration –
Part A: Initial Application
- Access the GST Portal: https://www.gst.gov.in/.
- Start Registration: Click on “Services”> “Registration”> “New Registration” or “REGISTER NOW” link.
- Select Registration Type: On the “New Registration” page, choose “New Registration.”
- Specify Taxpayer Type: In the “I am a” dropdown, select “Taxpayer.”
- Choose State and District: From the dropdowns, select the state and district where you require registration.
- Enter Business Name: In the “Legal Name of the Business” field, enter the legal name as per your PAN details.
- Provide PAN: Enter your business PAN or the proprietor’s PAN in the “Permanent Account Number (PAN)” field.
- Enter Email and Mobile Number: Provide the email address and mobile phone number of the Primary Authorized Signatory.
- Enter Captcha and Proceed:Type the captcha text and click “PROCEED.”
- Verify Existing Registrations (Optional): The portal displays your PAN-linked GSTINs/Provisional IDs/UINs/GSTP IDs (if any). Click “PROCEED” if applicable, or download details as a PDF (optional).
- Enter OTPs: Enter the OTPs received on your email and mobile number for verification. Each OTP is valid for 10 minutes. Resend OTPs if needed.
- Click Proceed to Get TRN: The system generates a Temporary Reference Number (TRN). Click “PROCEED” to receive TRN acknowledgement via email and mobile.
Part B: Completing the Application
Alternatively, you can access Part B later: Go to “Services”> “Registration”> “New Registration” and select “Temporary Reference Number (TRN)” to log in using your TRN.
- Enter TRN and Captcha: Enter the generated TRN and captcha text, then click “PROCEED.”
- Verify OTPs: Enter the new OTPs received on your email and mobile number (valid for 10 minutes). Resend OTPs if needed.
- Access My Saved Application: The “My Saved Application” page appears. Click the “Edit” icon (blue square with a white pen) under the “Action” column.
- Registration Application Form: The form has various tabs, such as Business Details, Promoters/Partners, and Authorized Signatory. Click on each tab to enter the required information.
Part C: After Completing the Application
- Once you’ve filled out all the details, submit the application electronically.
- The authorities will review your application and may request additional information.
- You will receive your GST Identification Number (GSTIN) upon approval.
GST Registration for E-commerce on Different Platforms
E-commerce businesses can register for GST online on various platforms. BUSY, however, offers a simplified and efficient solution for GST registration. Our user-friendly interface, guided steps, and automated workflows make the process hassle-free.
Additionally, BUSY offers continuous support and updates to ensure that the GST compliance rating is up to date with the latest GST regulations. By using GST billing software like BUSY, businesses can save effort and time while ensuring accurate GST registration and compliance.
Common Mistakes to Avoid During GST Registration
- Incorrect ITC Documentation: Make sure the records are accurate to avoid offsetting GST liabilities.
- Not using the Reverse Mechanism: Adhere to the RCM requirements.
- Procrastination and Last-minute Submission: Avoid penalties by filing on time.
- Contravening e-invoicing Regulations: Comply with e-invoicing to avoid penalties.
- Insufficient GST Compliance Training: Provide training to employees to avoid errors.
- Missing Documentation and Record-keeping: Use e-commerce reconciliation software to maintain proper records for claim substantiation and reconcile audit compliance.
- Lack of continuous monitoring and compliance upgrades: Stay updated with GST regulations.
Conclusion
GST registration is crucial for e-commerce businesses in India. By following the step-by-step GST guide and using one of the best GST software, businesses can streamline the registration process, ensure compliance, and avoid potential penalties.
Frequently Asked Questions
- What is GST registration, and why is it necessary for e-commerce businesses?GST registration is the process of getting a unique identification number ( GSTIN) from the Indian government to collect and remit GST on goods and services. E-commerce businesses must comply with Indian tax laws and avoid penalties.
- Can I run an e-commerce business without GST registration in India?GST registration is mandatory for e-commerce businesses with annual turnover exceeding the threshold. However, certain categories, like those supplying through agents or providing OIDAR services, must register regardless of turnover.
- How do I know if I qualify for GST registration?If you are engaged in the supply of goods or services and your annual turnover exceeds the threshold limit (currently ₹40 lakhs), you are generally required to register for GST.
- Is GST registration required to sell products outside of India?GST registration is generally not required if you exclusively sell products or services outside India. However, you may need to register if you have any domestic transactions.
