One crucial aspect of online selling is obtaining a Goods and Services Tax (GST) registration, which is mandatory for most businesses. If your yearly revenue in India exceeds ₹40 lakhs, you are required to get a Goods and Services Tax (GST) number or GSTIN.
Thus, if you’re selling products online without a GST number, then you must ensure that the goods you’re selling are on the list of GST-exempt goods and do not require an HSN code for classification.
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Situations Where Businesses Are Exempt from GST Registration
You can sell online without GST registration in certain situations:
- If your annual business output is below ₹40 lakhs (₹20 lakhs in special category states). However, e-commerce sellers are not excluded from GST registration, regardless of their sales
- If your service-oriented business has a total yearly revenue of less than ₹20 lakhs (₹10 lakhs in hilly and north-eastern states)
- Certain goods, such as unbranded food products, agricultural produce, and particular services
- If your primary business activity is the distribution and sale of agricultural goods
- If you’re a taxpayer not selling goods or services
- If you offer services or non-taxable goods
Can Businesses Sell on E-commerce Sites Without GST Registration?
You can become a seller on e-commerce platforms without GST registration, but only under specific conditions. As per the 48th GST Council Meeting, unregistered suppliers can sell goods intra-state through online marketplaces. All other sellers must mandatorily register for GST, and file GST returns accordingly.
The conditions for sale without GST registration are:
- Your total turnover is below the threshold all across India. The threshold limits vary by state, not exceeding ₹40 lakhs annually
- You are not involved in the production of taxable interstate supplies
For example, a small artisan from a regular state with an annual revenue of ₹30 lakhs can sell their handcrafted goods on an e-commerce site in the same state only, without registering for GST.
What Products Can Be Sold Without GST Registration?
Some products are excluded from the GST registration procedures in India. These goods include the following:
- Food items not sold in branded containers, such as wheat, rice, and cereals
- Fresh milk, eggs, fish, and similar food items
- Untreated green tea leaves and raw coffee beans
- Vegetables, such as onions, ginger, potatoes, and garlic
- Raw materials for slates, chalks, hearing aids, and handloom products
- Fruits such as melons and grapes
- Raw fibers such as khadi, raw silk, and unspun jute fiber
Some of these products may attract GST once processed, such as processed milk or cheese.
What are the services excluded from GST?
Here is a list of the services that are exempt from GST:
- Farming, packaging, harvesting, and storing agricultural produce
- Retail packaging, waxing services, and pre-conditioning
- Educational services, including meal distribution and medical facilities
- Supply and lease of agricultural machinery
- Goods transportation fees of less than ₹1500
- All transportation services
- Government and diplomatic services offered by different countries
- Charitable entities and ambulance services
- Services by government institutions such as IRDAI, RBI, NPS, Central and State Governments
- Basic Savings Bank Deposit (BSBD) banking facilities under the Pradhan Mantri Jan-Dhan Yojana
- Services related to religious events, tour guides, sports organisations, and libraries
- Healthcare services such as midday meal catering, VET clinics, paramedics, etc.
How to Sell Online Without GST Registration?
Here’s a step-by-step guide to sell online without GST registration:
- Choose a good or service that doesn’t incur GST. Ensure your business is operating within the state only
- Choose an e-commerce platform that allows online selling without GST registration. Some platforms include Flipkart, eBay, Amazon, etc.
- Create your account on your preferred platform and make a comprehensive product listing
- Set up a convenient payment method, such as Razorpay, to process payments
- You can start selling online and deliver your products through dependable courier services
- Promote the goods with the best marketing and branding campaigns
- Ensure your annual turnover does not exceed the threshold level
Frequently Asked Questions (FAQs):
1. Can I sell my products online without GST?
Yes, you can sell products online without GST in India by ensuring they are non-taxable goods. Selling taxable items requires a registered GST number. Even if your yearly revenue for taxable items is less than ₹20 lakhs, you will still need a GSTIN to sell the goods. If your business turnover is less than the threshold limit, you can make sales without a GST number.
2. How much sales can be done without GST?
Indian businesses can make an annual sale of upto ₹40 lakhs for regular states and ₹20 lakhs for special category states without attracting GST.
3. Can I sell on Amazon if I don’t have GST?
Yes, you can sell specific products only on Amazon without a GST registration, such as books or other exempt products. Amazon’s GST-exempt categories include agricultural commodities, unbranded food, and specified services. For all other products, you would need a GST number.
4. Which products are not applicable for GST?
Certain items are exempt from GST to provide accessibility. These include fresh milk, honey, cheese, agricultural products such as fresh fruits and vegetables, and fuel. Additionally, some unprocessed commodities, such as milk and cheese, may be subject to GST once they have been processed.
5. Which businesses do not need GST?
Businesses with an annual turnover of less than ₹40 lakhs in most states (and ₹20 lakhs in special-category states) can sell products without GST. Furthermore, certain services, such as those associated with religious events, sports organisations, tour guides, and libraries, are excluded from GST registration.
6. Can we sell on Meesho without GST?
Yes, you can sell on Meesho without a GST number. You can join as a vendor with only the Enrollment ID or UIN instead of GSTIN.
7. How to sell on Flipkart without GST?
- Visit the Flipkart seller portal and register your business
- Activate your Flipkart seller account by verifying your email address
- Once you open the dashboard, add a product under the ‘Listings’ section, with detailed information, including product title, description, and images
You are now ready to receive and complete orders on Flipkart.
