GST Council meets Wednesday on one registration for small online sellers

The GST Council is due to meet on Wednesday, 7 October, with a proposal that would let a small seller who trades only through e-commerce platforms hold one GST registration for the whole country. The scheme is optional. It is written for suppliers who have little or no shop floor outside one state, and whose goods move because an e-commerce operator stores them.

Under the present rule a seller needs a registered place of business in every state where a supply is treated as originating. A marketplace warehouse in another state has been enough to trigger that duty. The proposal would treat one state, the one where the seller actually sits, as the principal place of business. Warehouses elsewhere could be declared as additional places of business, but only with the prior consent of the e-commerce operator that runs them.

An official description of the draft says a single registration against a PAN can be taken in a state or Union Territory. Physical verification of the address, and Aadhaar authentication, would happen in that one state. Registration in a state where the seller has no premises of its own would follow the operator's consent, without a fresh intervention by the tax officer in that state.

The scheme stops at the marketplace. A seller who also supplies outside e-commerce platforms would have to take ordinary registration, including a physical place of business in each state where the law requires one. The draft is not a general single-registration regime. It is a narrow path for sellers whose only channel is an operator that already collects tax at source.

People familiar with the agenda told The Economic Times that the Council will also look at putting every online platform on the same footing for who pays tax on a service. The present rules leave an ambiguity on that point. The same meeting is expected to take up a wider set of changes that officials have described as GST 2.0: fewer mid-year rate changes, a rework of input tax credit for real estate and construction, wider vehicle credit, and export treatment for clinical trials run in India for foreign sponsors.

The e-commerce item is the one with a clear beneficiary. Marketplaces have argued for years that multi-state registration keeps small manufacturers off the platform. A seller in one district who wants a listing that can ship from a warehouse in three states currently faces three registrations, three returns, and three sets of notices. The draft would collapse that to one verified address, with the warehouse listed as an additional place only if the operator agrees.

The consent clause is the control. Without it, a seller could name a warehouse the operator does not want used as a place of business. With it, the operator becomes the gate for extra-state storage. Tax authorities keep the verification step, but only once, at the principal place.

Wednesday's meeting does not enact the scheme. The Council recommends. The Centre and the states still have to notify. What is on the table is specific enough to read: one PAN, one principal place, additional places only with operator consent, and no use of the scheme for sales that leave the platform. Sellers who want a number before the festival quarter will not get it from this meeting. They will get a decision on whether the form of registration changes at all.

The draft also answers a practical question sellers ask the tax desk. Where do the returns go? A single registration against one PAN, taken in the principal state, implies one return cycle for marketplace supplies, with the extra-state warehouses listed as additional places rather than as separate taxpayers. The official note does not publish the return form. It does say the registration itself is single.

Hundreds of thousands of marketplace sellers are the population named in accounts of the agenda. The draft does not set a turnover cap in the public description. It sets a channel test: goods only, through an operator that collects tax at source, with a physical presence in at least one state. A large brand that also sells from its own site would fail that test and stay on ordinary registration.

Wednesday is a recommendation day. States that collect their own share of GST have blocked simpler registration before, because a principal-place rule moves the verification, and sometimes the dispute, to one state. The consent of the operator is the compromise written into this draft. It keeps the warehouse state in the file without making the seller open a shop there.