GST is one of the most confusing topics for new online sellers in India. Do you need to register? What rate applies to your products? How do you file returns? This guide answers all of these questions in plain language.
Do You Need GST Registration?
GST Registration Thresholds
The general thresholds for GST registration in India are:
- ₹40 lakh annual turnover — for sellers of goods (₹20 lakh in special category states like those in the North East)
- ₹20 lakh annual turnover — for service providers (₹10 lakh in special category states)
However, there is an important catch for online sellers: If you sell on an ecommerce platform that collects tax at source (TCS) — which includes marketplaces like Amazon and Flipkart — you may need GST registration regardless of your turnover. For sellers on their own website using their own payment gateway, the standard thresholds apply.
Additionally, if you sell inter-state (e.g., you are based in Delhi but ship to customers in Maharashtra), GST registration has historically been mandatory irrespective of turnover. Check with your CA for the latest rules on this, as exemptions for small sellers have been discussed.
GST Rates for Common Products
| Product Category | GST Rate | Notes |
|---|---|---|
| Clothing (up to ₹1,000) | 5% | Most affordable clothing falls here |
| Clothing (above ₹1,000) | 12% | Higher rate for premium garments |
| Footwear (up to ₹1,000) | 5% | Value-based rate classification |
| Footwear (above ₹1,000) | 12% | Higher rate for premium footwear |
| Food items (unprocessed) | 0% | Fresh fruits, vegetables, grains |
| Food items (processed/packaged) | 5-18% | Depends on type of processing and branding |
| Pickles, sauces, condiments | 12% | Packaged and labelled food items |
| Handmade crafts | 5% | Most handcrafted goods |
| Jewellery (gold, silver) | 3% | Low rate for precious metals |
| Artificial/fashion jewellery | 5% | Imitation jewellery category |
| Cosmetics and beauty | 18% | Higher rate for beauty products |
| Electronics accessories | 18% | Covers most electronic items |
| Home decor and furnishings | 12-18% | Rate varies by specific product |
| Candles | 12% | Including decorative candles |
| Bags and purses | 18% | Leather and non-leather bags |
How to Register for GST
What Must Be on Every Invoice
GST Invoice Requirements
Every GST-compliant invoice must include:
- Your business name, address, and GSTIN
- Buyer's name and address (and GSTIN if B2B)
- Unique invoice number (sequential, no gaps)
- Date of issue
- HSN code for each product
- Description, quantity, and unit price
- GST rate and amount (CGST + SGST for intra-state, or IGST for inter-state)
- Total amount including tax
- Place of supply
Filing Schedule
| Return | What It Covers | Frequency | Due Date |
|---|---|---|---|
| GSTR-1 | Outward supplies (your sales) | Monthly or Quarterly* | 11th of next month |
| GSTR-3B | Summary of tax liability | Monthly or Quarterly* | 20th of next month |
| GSTR-9 | Annual return | Yearly | 31st December |
*Quarterly filing under the QRMP scheme is available for businesses with turnover up to ₹5 crore. This simplifies compliance significantly for small sellers.
Composition Scheme: A Simpler Option for Small Businesses
GST Composition Scheme
If your annual turnover is under ₹1.5 crore (₹75 lakh in special category states), you can opt for the Composition Scheme. Here is what it means:
- Lower tax rate — Pay 1% for manufacturers, 5% for restaurants, 6% for other service providers (of turnover, not on individual products)
- Simpler filing — File quarterly returns instead of monthly
- No input tax credit — You cannot claim GST paid on your purchases
- No inter-state sales — You can only sell within your state under this scheme
- No ecommerce platform sales — This scheme does not apply if you sell through ecommerce operators collecting TCS
Common GST Mistakes Online Sellers Make
How oBizee Helps with GST Compliance
Managing GST manually — tracking every sale, calculating tax, generating invoices — is tedious. oBizee helps by automatically tracking your revenue and order history, making it easy to generate reports your CA needs for GST filing. Your dashboard shows total sales, state-wise breakdowns, and order details — all downloadable.
The best time to understand GST is before you start selling. The second best time is right now. Get your basics right, work with a qualified CA, and focus on what you do best — building a great business.