• Notification Date: 19-12-2022
• Notification No: N/A

Unregistered Sellers allowed to make Intra-state Supply of Goods via E-commerce from October 2023

The GST Council announced on Saturday that e-commerce sellers supplying goods with a turnover of up to Rs 40 lakh and services with a turnover of up to Rs 20 lakh, but are unregistered under the Central Goods and Services Tax (CGST) Act will be allowed to make intra-state supply with effect from October 1, 2023. The council, under the chairmanship of finance minister Nirmala Sitharaman, approved the amendments in the GST Act and GST Rules, as well as the issuance of relevant notifications to enable the same. The Council declared the matter in the media briefing on the outcomes of its 48th meeting,  

Considering the time required for the development of the requisite functionality on the portal as well as for providing sufficient time for preparedness by the e-commerce operators (ECOs), the council has recommended that the scheme may be implemented with effect from 01.10.2023. 

In its 47th meeting in June this year, the GST Council had granted in-principal approval for allowing unregistered suppliers and composition taxpayers to make the intra-state supply of goods through ECOs such as Amazon, Flipkart, etc., subject to certain conditions. This move has been made to facilitate e-commerce for micro enterprises. These conditions included, the aggregate turnover on an all-India basis should not exceed the turnover specified under sub-section (1) of section 22 of the CGST Act and notifications issued there under. Further, the person is not making any inter-state taxable supply is the second condition. Unlike online sellers, offline sellers are exempted from registration. 

Traders’ body CAIT’s National President B.C. Bhartia and Secretary General Mr Praveen Khandelwal in a statement that this decision will empower small traders who are below the GST threshold limit to expand their business through e-commerce. There are more than 8 crore small traders in the country, but a large number of traders are conducting business activities without GST registration since their annual sale is below the GST threshold limit. Such traders will now be able to trade on e-commerce, they added. 

The GST registration waiver from October 2023 will also apply to e-commerce sellers. The turnover will be up to Rs 1.5 crore registered under the GST composition scheme. The foremost aim of the scheme is reducing the compliance cost for small taxpayers with lower tax rates of 2 per cent of turnover for manufacturers, 1 per cent for traders, and 5 per cent for restaurant businesses. 

Importantly, a Parliamentary committee report in June this year on the promotion and regulation of e-commerce in India had suggested extending the GST Composition scheme to online sellers in order to incentivise MSMEs toward e-commerce adoption.