CBIC notifies certain specified conditions for exemption from obtaining registration, in the case of persons making supplies of goods through an electronic commerce operator (ECO) who is required to collect tax at source u/s 52 of the CGST Act, 2023, vide CGST Notification 34/2023, i.e. exemption from GST registration to e-commerce suppliers meeting specific criteria.
CBIC Central Tax Notification 34/2023 dated 31/07/2023: Criteria for Exemption from GST Registration for Supplies thru ECOM Operators
The exemption applies if their aggregate turnover in the preceding financial year and the current financial year does not exceed the turnover threshold for registration in the State or Union territory.
The conditions prescribed by CBIC for exemption from registration for such persons, effective from 1st October, 2023, are as follows:
i) They shall not make any inter-State supply of goods.
ii) They shall not make supply of goods through electronic commerce operator in more than one State or Union territory.
iii) They must have a Permanent Account Number (PAN) issued under the Income Tax Act, 1961.
iv) Before making any supply of goods through an electronic commerce operator, they must declare their PAN, address of their place of business and the State or Union territory where they intend to make the supply on the common portal, which will be validated.
v) They will be granted an enrolment number on the common GST portal after successful validation of the declared PAN.
vi) They shall not be granted more than one enrolment number in a State or Union territory.
vii) No supply of goods shall be made through an electronic commerce operator unless they have been granted an enrolment number on the common portal.
viii) If they are subsequently granted registration under section 25 of the CGST Act, the enrolment number shall cease to be valid from the effective date of registration.
In conclusion, the small suppliers on ecommerce platforms have been allowed to sell goods and services to different states without GST registration, as long as their total sales do not exceed a certain threshold. It may not be out of place to mention that small businesses have already been exempted from GST registration for intra-state supplies (selling within the same state) if their turnover is below Rs 40 lakh for goods and Rs 20 lakh for services.