GST for Online Sellers in India: Do You Need It for Your Own Website?
Your turnover is ₹6 lakh, well under the ₹40 lakh limit. Then a buyer from another state orders, and that one parcel changes your GST answer.
In this post · 10 sections
You sell hand-block-printed kurtas from Jaipur through Instagram and a small website. Turnover is maybe ₹6 lakh a year, so you assume GST is a problem for later, because the limit is ₹40 lakh. Then a customer in Pune orders two kurtas, and that one parcel is the thing that changes your answer.
Most confusion about GST for small online sellers comes from mixing up three separate rules: the turnover threshold, the compulsory registration list, and the 2023 relaxation for marketplace sellers. This guide takes them one at a time, from the primary sources, for someone selling from their own website or Instagram.
Key takeaways
- If you sell only within your own state, the registration threshold for goods is ₹40 lakh of aggregate turnover in most states, ₹20 lakh in some, and ₹10 lakh in a few.
- Shipping goods to a buyer in another state is an inter-state taxable supply. Section 24 makes that registration compulsory regardless of turnover, and as of October 2026 no exemption has been notified for small suppliers of goods.
- The October 2023 relaxation (Notification 34/2023) only covers intra-state sales through a marketplace that collects TCS. It does not cover your own website or Instagram.
- Composition scheme dealers cannot make inter-state supplies, so the scheme rarely suits a seller who ships across India.
- Once registered, your invoice must meet Rule 46. Below ₹5 crore turnover, HSN is 4 digits on B2B invoices and optional on B2C invoices.
Rule 1: the turnover threshold (₹40 lakh, ₹20 lakh or ₹10 lakh)
Section 22 of the CGST Act sets the base rule. You must register in a state once your aggregate turnover in a financial year crosses ₹20 lakh, or ₹10 lakh in the special category states. The Act now defines those as Manipur, Mizoram, Nagaland and Tripura, and lets them raise their limit up to ₹20 lakh.
For goods sellers the more useful number is in Notification 10/2019-Central Tax, in force since 1 April 2019. It exempts anyone engaged exclusively in supplying goods from registration up to ₹40 lakh of aggregate turnover, with exceptions:
- anyone required to register under Section 24 (more on this below);
- sellers of ice cream, pan masala and tobacco (later amendments added some bricks and tiles);
- intra-state supplies in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand, where the lower Section 22 limit applies.
Two details trip people up. "Aggregate turnover" covers all taxable, exempt and inter-state supplies under your PAN across India, so Instagram, website and weekend-market sales go into one number. And the ₹40 lakh figure is only for exclusive suppliers of goods. If you also sell a service, such as paid styling sessions or workshops, the ₹20 lakh limit applies.
Rule 2: Section 24, where turnover stops mattering
Section 24 opens with "notwithstanding anything contained in sub-section (1) of section 22". In plain terms, the people it lists must register at any turnover. Two entries matter for online sellers:
- Clause (i): persons making any inter-State taxable supply.
- Clause (ix): persons supplying goods or services through an e-commerce operator that is required to collect tax at source (TCS) under Section 52.
Notification 10/2019 lists Section 24 persons as an exception, so the ₹40 lakh exemption does not rescue you once either clause applies. Services get gentler treatment: Notification 10/2017-Integrated Tax exempts suppliers of inter-state services below the threshold. Nothing equivalent exists for goods.
Rule 3: the 2023 relaxation for marketplace sellers
Clause (ix) used to mean that anyone selling on Amazon, Flipkart or Meesho needed a GSTIN from the first rupee. Notification 34/2023-Central Tax, effective 1 October 2023, carved out an exemption for sellers whose aggregate turnover stays under their Section 22 limit, on these conditions:
- no inter-state supply of goods at all;
- marketplace sales in only one state or union territory;
- a PAN, declared on the GST portal with your business address and state, in exchange for an enrolment number. You cannot sell through the marketplace until you have one.
Read condition one carefully. It says "such persons shall not make any inter-State supply of goods", which is not limited to marketplace orders. If you rely on this exemption for Meesho and then ship a website order to another state, you have broken a condition.
A newer change is on the way but not yet law. At its 57th meeting on 8 October 2026, the GST Council recommended a new Rule 14B. It would let small suppliers selling goods through marketplaces register in other states by declaring the marketplace's warehouse there as their place of business. It targets registered marketplace sellers, and it takes effect only once notified.
Your own website or Instagram: which rules apply
The Act's definition of an "electronic commerce operator" is broad: anyone who owns, operates or manages a digital platform for e-commerce. But clause (ix) and Notification 34/2023 only bite where the operator is required to collect TCS under Section 52. That duty applies to supplies made through the platform by other suppliers, where the operator collects the payment.
When a customer pays into your own Razorpay account or UPI ID for goods you sell yourself, no platform is collecting TCS on your sale. Instagram hosts the conversation; it does not collect your money. So clause (ix) generally does not apply to you. Neither does the 2023 relaxation, which exists only for marketplace sales.
That leaves two tests for a seller with their own store:
- Has your aggregate turnover crossed the Section 22 or Notification 10/2019 limit for your state?
- Do you ship goods to buyers outside your state?
If the answer to the second question is yes, Section 24(i) applies. The Jaipur seller with ₹6 lakh turnover needs a GSTIN the moment that Pune order ships. Many small sellers ship nationally without registering anyway; that is a real exposure. Registration is also less painful than it was: the same 57th Council release notes that the portal already grants registration automatically, without an officer, to applicants who do not intend to pass on more than ₹2.5 lakh of input tax credit a month.
Do you need GST? A decision table
| Your situation | Do you need GST registration? | Why |
|---|---|---|
| Own website or Instagram, goods only, buyers only in your state, turnover under your state's limit | No | Below the Section 22 / Notification 10/2019 threshold, and no Section 24 trigger |
| Same, but turnover crosses ₹40 lakh (or ₹20 lakh / ₹10 lakh in the listed states) | Yes | Section 22 threshold crossed |
| Own website or Instagram, any turnover, you ship even one order of goods to another state | Yes | Section 24(i): inter-state taxable supply |
| Marketplace only, one state, no inter-state sales, turnover under the limit, enrolment number obtained | No | Notification 34/2023 exemption |
| Marketplace in your state plus your own site shipping to other states | Yes | Section 24(i), and the Notification 34/2023 condition on inter-state supply is broken |
| Marketplace sales in two or more states | Yes | Notification 34/2023 allows only one state |
| Services (online classes, consultations) to clients in other states, turnover under ₹20 lakh | Generally no | Notification 10/2017-Integrated Tax exempts small inter-state service suppliers |
Composition scheme: lower tax, but no out-of-state sales
The composition scheme lets eligible sellers pay a small flat percentage of turnover instead of regular GST. Notification 14/2019-Central Tax sets the limit at ₹1.5 crore of prior-year turnover, or ₹75 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
The catch is in Section 10(2): a composition dealer must not be "engaged in making any inter-State outward supplies of goods or services". Since 1 October 2023 composition dealers may sell goods through marketplaces, but only within their state (Notification 36/2023 tells marketplaces to block their inter-state orders). A composition dealer also cannot charge GST to the customer or claim input tax credit.
So composition suits a local bakery or a one-city boutique, not a website shipping across India.
What a GST tax invoice must contain
Rule 46 of the CGST Rules lists the particulars. For a typical online order, that means:
- your name, address and GSTIN;
- a consecutive serial number of up to 16 characters, unique within the financial year, and the invoice date;
- the buyer's name, address and GSTIN if they are registered. For an unregistered buyer, name, delivery address and state are required when the taxable value is ₹50,000 or more, or when the buyer asks;
- HSN code, description, quantity and unit;
- total value, taxable value after any discount, the tax rate and tax amount split into CGST, SGST or IGST;
- place of supply with the state name, for inter-state supplies;
- whether tax is payable on reverse charge, and your signature (not needed on an electronic invoice issued under the IT Act).
How many HSN digits? Notification 78/2020-Central Tax, in force since 1 April 2021, ties it to your previous year's aggregate turnover: 4 digits up to ₹5 crore, 6 digits above. Sellers up to ₹5 crore may leave HSN off invoices to unregistered buyers. You still need the code yourself, because it decides your tax rate.
Rates moved recently. The two-rate structure of 5% and 18% (plus 40% for a few goods) took effect on 22 September 2025. One example that matters for Instagram sellers: apparel with a sale value up to ₹2,500 per piece is taxed at 5%, and above ₹2,500 at 18%.
Worked example: a ₹1,180 product at 18%
Say you sell a product taxed at 18% and the price on your site reads ₹1,180. Whether that price includes GST changes your margin by ₹180 per unit.
| ₹1,180 including GST | ₹1,180 excluding GST | |
|---|---|---|
| Taxable value | ₹1,000 (₹1,180 ÷ 1.18) | ₹1,180 |
| GST at 18% | ₹180 | ₹212.40 |
| Customer pays | ₹1,180 | ₹1,392.40 |
| Buyer in your state | CGST ₹90 + SGST ₹90 | CGST ₹106.20 + SGST ₹106.20 |
| Buyer in another state | IGST ₹180 | IGST ₹212.40 |
| You keep (before costs) | ₹1,000 | ₹1,180 |
Most B2C stores show tax-inclusive prices. The common mistake is registering, switching to inclusive pricing, and leaving every price unchanged. A product you used to sell for ₹1,180 now earns you ₹1,000. Rework your prices before the GSTIN goes live.
If you are still setting up the rest of the business, our checklist for starting an online store in India covers the steps around this one.
How this works in Selzix
For Indian stores, Selzix generates GST tax invoices with HSN codes for eligible paid orders, with your GSTIN on them, and produces a GST return report you can hand to your accountant. You set a store-wide GST rate and show prices including or excluding tax. Payments go to your own Razorpay account or UPI ID, so Selzix does not collect money on your behalf.
If you are not yet registered, note that Selzix cannot block checkout from other states, so you have to check each order's delivery address yourself. Other limits: one store-wide rate applies to every product, and Selzix does not register you, choose your HSN codes or decide your rate. Those stay your responsibility (or your CA's). See the full list on the features page.
Frequently asked questions
I sell on Instagram and get paid by UPI. Do I need GST if my turnover is ₹5 lakh?
Not if every buyer is in your own state and you sell only goods. The moment you ship goods to another state, Section 24(i) requires registration regardless of turnover.
Can I use the Notification 34/2023 exemption for my own website?
No. It covers only goods supplied through an e-commerce operator that collects TCS under Section 52, within one state. Your own website or Instagram store is outside it, and shipping out of state from your own site breaks its conditions for your marketplace sales too.
I sell online courses to students across India. Is that the same?
No. Notification 10/2017-Integrated Tax exempts suppliers of inter-state services from registration while their aggregate turnover stays under the threshold (₹20 lakh in most states). The inter-state trigger in Section 24(i) bites hardest on goods.
Can I register voluntarily before I need to?
Yes. Notification 10/2019 itself refers to people who take registration by choice under Section 25(3). Once registered you must charge GST and file returns even if turnover stays small, so plan your prices first.
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