We are starting an e-commerce business. Do we need GST registration from day one or is there a threshold limit?

Detailed Legal Analysis

Under Section 24 of the CGST Act 2017, all e-commerce operators and sellers on e-commerce platforms are required to obtain GST registration mandatorily, regardless of the turnover threshold, with no threshold exemption. This means even if your turnover is below Rs 20 lakh, which is the threshold for regular businesses, you must register for GST if you sell through e-commerce platforms like Amazon, Flipkart, or your own e-commerce website acting as an aggregator.

The registration can be done online through the GST portal by filing Form GST REG-01 along with required documents including PAN, Aadhaar, proof of business address, and bank account details. If you are an e-commerce operator, you must also collect TCS at 1% under Section 52 of the CGST Act from the suppliers on the platform.

Regular businesses that sell directly without e-commerce platforms are exempt from GST registration until turnover exceeds Rs 40 lakh for goods and Rs 20 lakh for services. Non-registration when required attracts penalty under Section 122 of the CGST Act including a penalty of Rs 10,000 or 10% of the tax due, whichever is higher.