In a major relief to small merchants, the GST Council has introduced an optional simplified registration mechanism for sellers supplying goods exclusively through e-commerce platforms, allowing them to declare an e-commerce operator’s warehouse as their principal place of business in states where they have no physical presence.
Under the scheme, sellers whose monthly input tax credit (ITC) claims are below Rs 2.5 lakh, excluding stock transfers, can opt for the simplified registration mechanism, according to details shared by the Finance Ministry on Friday. Such sellers will be permitted to supply goods only through the specified e-commerce operators (ECOs) and cannot make sales outside these platforms.
The e-commerce operator must give prior consent to the seller to declare its warehouse as the principal place of business in the relevant state or Union Territory. Without this consent, the registration application will be rejected.
“The application will be forwarded to the concerned ECO, whose warehouse is declared to be used as PPoB in that State/UT, or APoB, for consent within seven working days,” the ministry said.
Once consent is received, the application will be forwarded to the jurisdictional officer in the seller’s home state for biometric-based Aadhaar authentication, photograph and verification of original documents, along with physical verification of the principal place of business in the home state.
The scheme also mandates biometric-based Aadhaar authentication and physical verification in the seller’s home state. Only one registration against a PAN will be permitted in a particular state.
The changes are aimed at easing compliance for small businesses selling through online marketplaces. Under the existing framework, sellers generally need GST registration in states where they have a place of business, creating hurdles for smaller merchants seeking to expand their operations beyond their home state.
The GST Council has proposed the measures to reduce compliance costs for small online sellers and facilitate inter-state supplies through e-commerce platforms.