GST number no longer mandatory for Intra-state Ecommerce

The 48^th GST council meeting recommended various measures for facilitation of trade. One of the crucial decisions to support local manufacturing and production was scrapping of mandatory GST registration for selling goods via Ecommerce platform.

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The GST council in its 47^th meeting approved allowing unregistered suppliers and composition taxpayers to make intra-state supply of goods through Ecommerce Operators (ECOs), with certain conditions.

In the 48^th GST meeting, the council approved the amendments in the GST Act and GST Rules including issuance of relevant notifications, to enable the same. Considering the time required for development of the requisite functionality on the portal and to provide sufficient time for preparedness by the ECOs, the council has shared the tentative implementation date of 1^st Oct 2023.

With 830 million users, India is the 2^nd largest internet market. The Indian e-commerce market is estimated to be worth over $55 billion in 2021 and is expected to have an annual gross merchandise value of $350 billion by 2030 growing at CAGR of 23%.

Applauding the move, an industry specialist stated, “The current GST norm enables a retailer with an annual turnover of 20-40 lacs to do intra-state business via ecommerce. Starting from 1^st October 2023, small and local manufacturers even with zero turnover will also be eligible to sell their products on ecommerce without a GST number within their state.”

Since the process of obtaining a GST number can be quite complex, the removal of mandatory GST number for ecommerce registration will benefit around 120,000 small and medium manufacturers which include:

1. Local artisans who are unable to access online buyers
2. Regional retailers facing language barriers
3. Self-help groups and NGOs working for the growth of local businesses
4. Women entrepreneurs working from home, to boost the reach of their products

As many of us are accustomed to online purchasing of various day to day items like clothing, kitchenware, furniture, décor items or even groceries, Amazon, BigBasket, Flipkart etc. have emerged to be an essential part of our day to day lives.

Giving a pool of choices to thousands of online shoppers, with this move, the government aims to benefit a large number of local manufacturers under the “Make in India” and “Aatmanirbhar Bharat” initiative.