Quick answer: You must register for GST once your yearly sales cross Rs 40 lakh for goods in most states (Rs 20 lakh in some, including Telangana) or Rs 20 lakh for services. You must also register from the first sale if you sell goods to another state, or if you keep stock in another state. Since 1 October 2023, small sellers who sell goods on a platform inside one state and under the limit can skip registration, with conditions. Most online sellers who ship across states need a GSTIN.
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Many small sellers hear two opposite things: “no GST until 40 lakh” and “you cannot sell on Amazon without GST”. Both are partly true. This guide explains which rule applies to you, what registration needs, what the tax collected at source on marketplaces is, and what happens if you register late. Facts were checked on 25 October 2026. This is general information, not tax advice. Confirm your case with the GST portal or a chartered accountant.
On this page
- The turnover limits
- When there is no limit at all
- The small-seller relief for online platforms
- Tax collected at source on marketplaces
- Check your own case
- The composition scheme: only for some sellers
- How to register and what you need
- What happens if you register late
- Registered or not: what changes
- What the official notification says
- How the tax collected at source works
- A monthly routine for a small seller
- Frequently asked questions
- Sources
The turnover limits
Registration is based on your aggregate turnover in the financial year, counted across all states for the same PAN.
| What you supply | Where | Limit |
|---|---|---|
| Goods | Most states and UTs | Rs 40 lakh |
| Goods | Telangana, and special-category states such as Puducherry, Meghalaya, Sikkim, Arunachal Pradesh, Uttarakhand | Rs 20 lakh |
| Goods | Jammu and Kashmir, Ladakh, Assam | Rs 40 lakh |
| Services | Most states | Rs 20 lakh |
| Services | Manipur, Mizoram, Nagaland, Tripura | Rs 10 lakh |
The state groupings come from the 2019 limit increase as listed by ClearTax. One 2026 guide shows Rs 10 lakh for goods in the four north-eastern states Manipur, Mizoram, Nagaland and Tripura, while the 2019 list shows Rs 20 lakh. Because the sources differ, confirm the limit for your state with the GST office or the portal.
When there is no limit at all
The turnover limit does not help you if any of these apply. Section 24 of the CGST Act requires registration from the first rupee of sales for:
- Anyone who supplies goods to another state (inter-state supply).
- Sellers through an e-commerce platform that collects tax at source, except the small intra-state goods sellers described below.
- Casual taxable persons and non-resident taxable persons.
- Persons who pay tax under reverse charge, and certain agents and input service distributors.
“Inter-state” includes keeping stock in a warehouse in another state. Using a platform fulfilment centre can move your stock across states, which brings you into the no-limit group. Check where the platform will store your stock before you opt in.
The small-seller relief for online platforms
Since 1 October 2023, sellers of goods through e-commerce platforms can operate without a GSTIN if all of these hold, according to two guides:
- Your yearly sales are below the limit for your state.
- All your supplies are within a single state or union territory.
- You are not required to register on any other ground.
- You give your PAN and an enrolment number on the GST portal.
- You do not claim input tax credit.
It covers goods only, not services. One inter-state sale or stock in another state ends the relief. Two guides disagree on the notification number, so it is left out. Search the CBIC site for the 2023 notification on e-commerce suppliers if you want the original text.
Tax collected at source on marketplaces
If you are registered and sell through a platform, the platform collects tax at source (TCS) on your net taxable sales and pays it to the government. One guide says the rate has been 0.5 percent since 10 July 2024, down from 1 percent. On Rs 1,000 of taxable sales that is Rs 5. It is not an extra cost: it shows up in your GST credit statement, and you can use it to pay your GST or claim it back. Match it with your settlement reports every month.
Do not confuse it with the 0.1 percent income-tax TDS that platforms deduct under section 194-O, which is a separate matter.
Check your own case
Answer five questions to see where you stand.
Based on the rules as described in the guide above, checked on 25 October 2026. Check the GST portal or a professional for your exact case.
The composition scheme: only for some sellers
The composition scheme lets a small business pay a low flat percentage of turnover and file less often. One guide gives the limit as Rs 1.5 crore for goods (Rs 75 lakh in special-category states) and a 6 percent scheme for services up to Rs 50 lakh, with a quarterly statement and an annual return. The scheme is generally not open to people who make inter-state sales or sell through platforms that collect TCS, but this is not confirmed on an official page, so check before choosing it. Composition sellers also cannot claim input tax credit.
How to register and what you need
Registration is done online on the GST portal and is free. The usual flow is: fill Part A of the application and get a temporary reference number, fill Part B with your details and documents, authenticate with Aadhaar, and receive an application reference number. Many applications are granted within about 3 to 7 working days, but a verification request can stretch it to weeks.
- PAN of the business or proprietor.
- Aadhaar of the proprietor, partners or directors, and the authorised signatory, with photographs.
- Proof of your business address: electricity bill or ownership document, or a rent agreement with the landlord’s proof.
- Bank account proof. If it is not ready, you can add it after approval, within the time stated on the portal.
- Partnership deed or incorporation certificate, if you are not a sole proprietor.
What happens if you register late
One guide lists a penalty of Rs 10,000 or the tax evaded, whichever is higher, plus the tax with interest, for selling when you should have been registered. You may also lose input credit for the unregistered period unless you register within the allowed time. The practical rule: track your turnover every month, and apply when you are around 80 percent of the limit.
Registered or not: what changes
| Not registered | Registered | |
|---|---|---|
| Charge GST on sales | No | Yes, and you must issue tax invoices |
| Claim input tax credit on purchases | No | Yes, in the regular scheme |
| Sell goods to other states | Not allowed without registration | Allowed |
| Sell on major platforms | Only within the small-seller relief | Yes |
| Returns and paperwork | None | Monthly or quarterly returns |
What the official notification says
The small-seller relief comes from Notification No. 34/2023-Central Tax, dated 31 July 2023 and effective 1 October 2023, published by the GST Council. It exempts a person who supplies goods through an e-commerce operator that collects tax at source, but only when all of these hold: no inter-State supply of goods, supply through e-commerce operators in only one State or Union territory, a PAN, and a declaration of PAN, business address and State on the common portal before supplying. The seller then gets an enrolment number, and may not supply through a platform without one. The enrolment number stops being valid from the date the seller registers under section 25. The exemption also needs aggregate turnover within the section 22(1) threshold in the previous and current financial years.
How the tax collected at source works
The e-commerce operator collects tax at source (TCS) on the net value of taxable supplies made through its platform. Per the GST Council’s TCS FAQs, the operator deposits it and files GSTR-8 within 10 days after the month ends, and the amount is credited to the seller’s electronic cash ledger. The seller can use it to pay tax, or claim a refund under section 54(1) if unused.
| Period | Intra-State rate | Split | Inter-State rate |
|---|---|---|---|
| Up to 9 July 2024 | 1% | 0.5% CGST + 0.5% SGST/UTGST | 1% IGST |
| From 10 July 2024 | 0.5% | 0.25% CGST + 0.25% SGST/UTGST | 0.5% IGST |
The reduced rate came through Notification No. 15/2024-Central Tax dated 10 July 2024, according to a GSTN advisory summary. Exempt supplies, reverse-charge supplies and supplies by composition taxpayers are outside the TCS base, per the official FAQs.
A monthly routine for a small seller
- Add up the month’s sales across every platform and your own website, since turnover is counted on the same PAN.
- Compare the running total with your state limit and mark the point where you reach about 80 per cent.
- Download the platform settlement report and compare the TCS shown with the figure on the GST portal.
- Keep invoices and settlement reports for the year. An accountant will need them.
- Before sending stock to a warehouse in another state, check whether that makes you an inter-State seller.
This guide is general information, not tax advice. For your own case, check the GST portal or ask a tax professional.
Frequently asked questions
I only sell a few items on Amazon. Do I need GST?
If you sell goods only inside your own state, stay under the limit, keep stock only in your state and complete the platform enrolment, you may not. Any sale to another state means you do.
Do my sales on different platforms add up?
Yes. The limit is counted on your total sales across all states and all channels for the same PAN, not separately for each platform or shop.
Is a GST number needed to open a bank account or get a business loan?
Not by law. Some platforms, banks and customers ask for it, so a GSTIN can make doing business easier.
This guide is general information, not tax or legal advice. GST rules and notifications change, so confirm on the GST portal or with a chartered accountant before you act.
Is the enrolment number the same as a GST number?
No. Under the 2023 notification, the enrolment number lets a small seller supply through platforms without full registration. It stops being valid once you register under section 25.
Can I get back the TCS taken from my payouts?
The official FAQs say the amount is credited to the seller’s electronic cash ledger. The seller can use it to pay tax or claim a refund under section 54(1) if it stays unused.
Does selling in two states cancel the relief?
Yes. The notification allows supply through e-commerce operators in no more than one State or Union territory, and no inter-State supply of goods.
Sources
View sources (6)
| Source | What it was used for |
|---|---|
| CalcGuru, “GST registration in India (2026): thresholds, 3-day process, documents” calcguru.in | limits, the 2023 small-seller relief, composition limits, registration process, penalties. A secondary source, published 7 August 2026. |
| Patron Accounting, “GST registration mandatory for Amazon and Flipkart sellers?” patronaccounting.com | section 24 for platform sellers, the intra-state goods exemption, TCS rate of 0.5 percent. A secondary source. |
| ClearTax, “GST registration limits increased” cleartax.in | 2019 limits by state category, inter-state suppliers and platform sellers must register. |
| GST Council, Notification No. 34/2023-Central Tax (31 July 2023) gstcouncil.gov.in | official conditions for the small-seller relief and the enrolment number. |
| GST Council, FAQs on tax collection at source gstcouncil.gov.in | who collects TCS, GSTR-8, credit to the cash ledger, refund route. |
| Cashflo, summary of GSTN advisory on GSTR-8 changes (2024) cashflo.io | TCS cut from 1% to 0.5% from 10 July 2024 under Notification 15/2024-CT (secondary summary). |
