GST is the part of selling online that people avoid reading about until a marketplace blocks their listing or a CA sends a bill. It is genuinely less complicated than its reputation — but the rules have changed several times, and a lot of what is written online is out of date.
This is the current shape of it, in plain language.
Do you need to register?
Work through this in order.
Are you selling through a marketplace?
If you list on Amazon, Flipkart, Meesho or similar, check their current seller requirements first. Ecommerce operators collect tax at source on your behalf and have their own enrolment rules. In practice this is the most common reason a small seller registers.
What is your annual turnover, or projected turnover?
Goods: the widely used threshold is ₹40 lakh, with ₹20 lakh applying in several special-category states. Services: ₹20 lakh, and ₹10 lakh in some states. If you are nowhere near, you have time.
Are you supplying across state lines?
Inter-state supply rules differ for goods and services and have been amended more than once. This is the single question most worth asking a CA rather than a forum.
Do you want input tax credit?
Registered sellers can offset GST paid on courier bills, packaging, software subscriptions and advertising against GST collected. For a store spending ₹30,000 a month on those, the credit is real money.
Do your customers need a GST invoice?
If you sell to businesses at all — corporate gifting, bulk orders, B2B — you will be asked, and not being able to issue one costs you the order.
What registering actually commits you to
This is the part people underestimate. Registration is a one-time form; compliance is a monthly habit.
| Obligation | Frequency | Effort |
|---|---|---|
| GSTR-1 (outward supplies) | Monthly, or quarterly under QRMP | 30–90 min with clean records |
| GSTR-3B (summary and payment) | Monthly, or quarterly under QRMP | 30 min |
| Annual return | Yearly | A few hours, usually with a CA |
| Tax-compliant invoices | Every order | Automatic if your store issues them |
| Record retention | Ongoing | Keep everything for 6 years |
Budget ₹1,000–₹3,000 a month for a CA to handle filings for a small store. Doing it yourself is possible and is a false economy once you are past about 100 orders a month.
Rates, after the 2025 reform
The September 2025 reform collapsed the old four-slab structure into a simpler one: two principal rates covering most goods and services, plus a higher rate reserved for a short list of demerit and luxury items. Several everyday categories moved down.
What this means practically for a small seller:
- Check your category's current rate specifically. Do not rely on an article from 2023, including the parts of this one that age.
- If your rate moved, your pricing moved. A product priced at ₹999 inclusive of an old rate has a different ex-tax value at the new one. Decide whether to keep the shelf price or pass the change on.
- Your invoice templates need updating when a rate changes, and so does anything hard-coded in your store.
HSN codes, briefly
Every product you sell has a Harmonised System of Nomenclature code, and it goes on your invoice. The number of digits required depends on your turnover — smaller sellers report fewer digits.
Common ones for small Indian stores:
| Category | Typical HSN chapter |
|---|---|
| Cotton textiles, made-ups | 63 |
| Apparel, knitted | 61 |
| Apparel, not knitted | 62 |
| Ceramic tableware | 69 |
| Jewellery, imitation | 71 |
| Candles | 34 |
| Soaps and cosmetics | 33, 34 |
| Wooden articles | 44 |
| Leather goods | 42 |
Get the exact code confirmed once, per product, at setup. A wrong HSN is a small error that becomes an annoying one at filing time.
The records you must keep
Common mistakes
- Registering before you need to, then discovering that filing nil returns every month forever is its own small tax.
- Not putting your GSTIN on the store, so business buyers assume you cannot invoice them.
- Forgetting input credit on courier bills. For a store spending ₹25,000 a month on shipping, this is thousands of rupees a year left on the table.
- Treating COD collections as revenue on receipt. The taxable event is the supply, not the day the courier remits.
- Ignoring credit notes for returns, which quietly overstates your output tax.
Frequently asked questions
Do I need GST registration to sell on my own website in India?
Generally not, if your turnover is below the applicable threshold and you are not required to register for another reason. Selling through a marketplace usually does require registration or enrolment. Confirm your specific situation with a CA — the inter-state rules in particular have changed more than once.
What is the GST threshold for online sellers?
The widely cited figures are ₹40 lakh of annual turnover for goods and ₹20 lakh for services, with lower limits in several special-category states. Check the current numbers before relying on them.
Should I register voluntarily even if I'm under the threshold?
Often yes, if you spend meaningfully on courier, packaging, software and ads — the input credit can outweigh the compliance cost. Usually no, if you are a hobby-scale seller with low expenses, because monthly filings are a permanent obligation.
What is TCS and does it affect me?
Tax collected at source is deducted by marketplace operators on the value of your sales and deposited against your GSTIN. You claim it back in your returns. It only applies when you sell through an ecommerce operator, not on your own website.
Can I claim input credit on Instagram and Google ads?
If those invoices carry GST and your GSTIN, generally yes. Make sure your GSTIN is entered in the ad account's billing settings — many sellers discover months later that it was never added and the credit is gone.
What happens if I cross the threshold mid-year?
You must register once you cross it, within the prescribed window. Watch your run rate rather than your year-to-date total, so it does not arrive as a surprise in month nine.