E-commerce GST Registration and Tax Collection at Source (TCS) Guidelines
E-commerce platforms and online sellers in India must adhere to specific GST registration rules, including provisions for Tax Collection at Source (TCS). This guide explains who is responsible for collecting TCS, the mandatory GST registration process for e-commerce entities, and procedures for registration cancellation. It also clarifies GST registration for overseas providers of Online Information and Database Access or Retrieval (OIDAR) services, detailing what constitutes OIDAR and related compliance penalties.
E-commerce GST Registration and Tax Collection at Source (TCS) Guidelines
The Goods and Services Tax (GST) registration requirements for e-commerce operators, online retailers, and sellers differ from standard registration procedures, particularly where Tax Collection at Source (TCS) provisions are applicable to the e-commerce operator. This article delves into the specific details of these regulations.
Latest Updates
The 56th GST Council meeting, held on September 3, 2025, provisionally approved a simplified registration process for small e-commerce suppliers operating across different states, aiming to streamline compliance. Consequently, this simplified GST registration mechanism will be implemented starting November 1, 2025.
Who is Responsible for TCS Collection under GST?
Under GST law, e-commerce aggregators are obligated to collect and remit tax at a rate of 0.5% on each transaction, as mandated by Section 52 of the CGST Act. Dealers and traders selling goods or services online will receive payments after this 0.5% tax deduction. All such traders and dealers, regardless of whether their turnover falls below the prescribed threshold limit, must register under GST to claim the tax collected by these aggregators.
Important Notes:
- Service providers who do not operate through an e-commerce platform liable for TCS collection, and whose turnover is below Rs. 20 lakh, are exempt from obtaining GST registration.
- E-commerce operators subject to Section 52 of the CGST Act are ineligible for the composition scheme.
GST Registration Requirements for Entities Subject to TCS
According to Section 24 of the CGST Act, all e-commerce companies are required to obtain GST registration without exception.
Any individual or entity mandated to collect TCS must submit an electronic application for registration, either signed or verified via an Electronic Verification Code (EVC), using Form GST REG-07. This submission can be made directly through the GST portal or via a Commissioner-notified facilitation center.
CGST Rule 12(1A) stipulates that an e-commerce operator lacking a physical presence in the State or Union Territory where operations occur must specify that State's name in Part-A of the REG-07 form. Furthermore, if the principal place of business is located in a different State from the one mentioned in Part-A, it must be declared in Part-B.
Upon verification, the proper officer will grant registration and issue a certificate in Form GST REG-06 within three working days of the application submission date.
Cancellation of GST Registration for E-commerce Operators
If, after inquiry or proceeding, the proper officer determines that a person is no longer required to collect TCS, their registration will be canceled. This cancellation will be communicated electronically to the individual in Form GST REG-08. The cancellation process will adhere to the procedures outlined in CGST Rule 22.
The officer will follow the identical cancellation procedure as applied to regular taxpayers.
GST Registration for Overseas Online Information Suppliers
What constitutes online information and database access or retrieval services (OIDAR)? OIDAR refers to services delivered via the internet. These services are primarily automated, requiring minimal human intervention, and are impossible without information technology.
Applicability
Budget 2023 Update (to be notified): The definition of OIDAR has been amended to remove the phrase