UPDATED ON 7/2/2024
The information provided in this article is not a legal advice. You should consult your CA or tax consultant for further clarifications.
GST number was made mandatory for online sellers because there is no turnover threshold for inter-state selling unlike for intra-state selling where threshold limit applies. For ecommerce, whether you sell locally or inter-state, GST number is compulsory.
Now this really is a challenge for small sellers especially the new ones or for those who want to start home-based business. They find it a big headache to get GST number.
So, they either choose to sell through WhatsApp or Facebook groups. Some even take the risk of selling without GST number which may result in paying heavy penalties.
Though there are advantages of having GST number but for new aspiring sellers it definitely is a hurdle. That’s why we keep on receiving queries from our readers about possible ways to sell without GST number.
When you go to register as a seller on marketplaces like Amazon and Flipkart etc., they ask for GST number along with other documents like PAN number etc.
Remember, marketplaces want to register more and more sellers as it is their business as well. Their earning depends on success of their sellers. They do every effort to help sellers generate more sales.
So they try to make registration as easy as possible. If they are asking for GST number, that must absolutely be compulsory as per law. Why would they unnecessarily make it difficult for new sellers if it’s not mandatory.
Now this does not mean you can not sell online without GST.
Here’s some relief for marketplace sellers:
You can sell on marketplaces within your registered state. For this you need to obtain composition GSTIN or Enrolment ID / UIN from the GST website. The state you register during Enrolment ID registration will be considered your registered state.
Remember, If you already are doing business and your annual turnover is more than 40 lakh rupees, you will require regular GSTIN. In north-eastern states the limit is 20 lakh rupees.
Here are some other ways to sell without GST online
- You can sell tax-exempted items like books, maps, plastic bangles and certain notified handicraft goods. You can check for updated list at GST website https://cbic-gst.gov.in/.
- You can sell products as a reseller with apps like Meesho, Shopsy, and Glowroad. But, you won’t be able to build big business as a reseller.
- Create a website or mobile app to promote your business in your state. The purpose should also be to attract customers to your physical location.
- Share products on WhatsApp to your contacts and and deliver products physically or provide pickup facility. This way you are promoting your offline business where threshold limit is applicable to sell within your state.
- Register your business on Google My Business to promote your shop or other physical location on Google Search.