GST Relief for Small E-Commerce Sellers: Single-State Registration Plan

A seller registered in Maharashtra who stores stock in an Amazon fulfilment centre in Karnataka, a Flipkart warehouse in Telangana, and a third-party facility in Delhi currently needs a separate Goods and Services Tax (GST) registration in each of those states. That requirement is the subject of a proposal now before the GST Council, but as on the date of this post, it remains a proposal and not a notified rule.

Key takeaways

• The Central Board of Indirect Taxes and Customs (CBIC) is reported to be preparing a simplified GST registration framework for small e-commerce suppliers, for consideration by the GST Council.
• The core idea under discussion is to let an eligible small seller operate on a single GST registration, without a fresh registration in every state where a marketplace warehouse holds their inventory.
• This is a proposal at the discussion stage. It is not yet law. Existing multi-state GST registration requirements continue to apply until a formal notification is issued.
• Eligibility is expected to be limited to small or micro suppliers, with a turnover threshold and conditions still to be prescribed.
• Sellers should not surrender or restructure any existing GST registration on the strength of this proposal alone.

What is being proposed, and what has actually been decided

Under the current position, a supplier's obligation to register in a state is generally triggered by having a place of business there, and a marketplace warehouse used to store a seller's inventory can trigger this requirement. This is what pushes many multi-state fulfilment sellers into holding several GST registration numbers even though their own office, accounts and management sit in one state.

The proposal reported to be before the GST Council would change this for a defined category of small suppliers. The broad concept, as described in current reporting, has two moving parts. First, an eligible seller would hold one primary GST registration rather than one per state of storage. Second, a marketplace operator's warehouse would be treated, for the purposes of this scheme only, as connected to the seller's registered place of business rather than as an independent place of business requiring its own registration.

It is important to be precise about sequencing here. The GST Council is understood to have approved the broad concept of simplifying registration for small suppliers selling through e-commerce operators in principle in 2025, as part of a wider compliance-simplification discussion. The detailed mechanics, eligibility conditions and legal drafting are what remain pending. A GST Council recommendation is not, by itself, a change in law. A change takes effect only when the corresponding notification or rule amendment is issued under the Central Goods and Services Tax Act, 2017, or the relevant State GST Act, and published. Until that happens, the existing registration rules apply in full, and any seller planning around the proposal is planning around something that does not yet bind anyone.

Why multi-state registration is a real cost for small sellers

For a large retailer, running five or six GST registrations across states is a manageable, if tedious, back-office function. For a seller doing a few crore rupees a year through Amazon FBA, Flipkart fulfilment, or similar networks, the same requirement carries a disproportionate cost. Each registration brings its own periodic returns, its own reconciliation between the marketplace settlement report and the books, its own state-wise input tax credit tracking, and its own exposure to state-specific queries or notices.

A seller with inventory split across four states is, in practice, running four small compliance operations layered on top of one small business. Professional fees scale with the number of registrations, not with the size of the seller. This is precisely the gap the proposed scheme is aimed at closing: it does not propose to remove GST itself, only to remove the trigger that forces registration in a state purely because a marketplace happens to store stock there.

A worked illustration

Consider a home-care products seller based in Pune with annual turnover of around ₹80 lakh, selling through Amazon FBA with stock held in fulfilment centres in Karnataka, Delhi and West Bengal, in addition to Maharashtra. Under the present framework, this seller needs a GST registration in each of the four states where stock physically sits, because each fulfilment centre location can constitute a place of business for GST purposes. That means four sets of periodic returns, four sets of state-wise ITC ledgers, and reconciliation across four state jurisdictions every month, even though the seller has one office, one accountant and one bank account.

If the proposed single-state mechanism is eventually notified in a form resembling what has been described publicly, this seller could, subject to meeting the eligibility threshold and conditions, operate with the one Maharashtra registration alone, with the fulfilment centres in the other three states no longer independently triggering registration. The reduction is not in GST paid; the seller's underlying supplies remain fully taxable and IGST/CGST/SGST liability on actual sales does not change. The reduction is in registration and filing overhead. That distinction matters and is worth restating plainly: this is a compliance simplification proposal, not a tax reduction.

What stays the same, whatever the final scheme looks like

Whatever form the eventual scheme takes, a few things are unlikely to change. GST will still be payable on every taxable supply at the applicable rate for the goods concerned. Invoicing, e-invoicing where applicable, and outward supply reporting will still be required. Tax Collected at Source (TCS) obligations on e-commerce operators under the GST law are a separate mechanism from this registration proposal and are not what is under discussion here. Input tax credit will still depend on a clean paper trail between the seller's invoices, the marketplace's reporting, and the recipient's returns; a simplified registration does not simplify the ITC matching problem, and may in some respects make it more important to get right, since more of the seller's supply chain will sit outside their own state registration.

Current position versus what is proposed

Aspect	Current position (as on this post)	What is reported as proposed
GST registration per state of storage	Generally required wherever a marketplace warehouse holds the seller's stock	Single primary registration for eligible small sellers, warehouse not independently triggering registration
Eligibility	Not applicable; rule applies to all suppliers meeting existing registration thresholds	Expected to be limited to micro/small suppliers; threshold not yet announced
GST payment, invoicing, returns	Required as per existing law	Expected to continue; proposal addresses registration, not tax liability
Legal status	Existing CGST/SGST/IGST Act provisions and rules, in force	Reported to be under discussion for the GST Council meeting expected 12 September 2026; not yet notified

Table caption: Comparison of current GST registration position for multi-state e-commerce sellers against the framework reported to be under CBIC and GST Council discussion. Prepared for this post as on 8 September 2026.

What to actually do now

A seller reading about this proposal should treat it as a signal to prepare, not a trigger to act. In practice, this means keeping every existing GST registration active and current, and not cancelling any registration on the assumption that a single-state scheme is imminent. It is worth using this period to clean up exactly the kind of records the eventual scheme is likely to demand anyway: a state-wise list of every fulfilment centre or warehouse currently used, a reconciliation of GST returns against marketplace settlement reports for each state registration, and a review of input tax credit balances that remain unmatched or stuck in any state.

Sellers should also watch the outcome of the GST Council meeting expected around 12 September 2026, and specifically look for the eligibility turnover threshold, the categories of e-commerce suppliers covered, and whether existing multi-registered sellers get a transition path or must apply afresh. Until the formal notification is published on the government's GST portal or in the official gazette, no change should be assumed to be in effect. A seller in genuine doubt about their current multi-state exposure should discuss their specific registration position with a GST practitioner before making any structural change.

Where this is unsettled

As on the date of this post, the eligibility threshold, the precise legal mechanism for treating a marketplace warehouse as connected to a single registration, the treatment of interstate supply and place-of-supply rules under the scheme, and the compliance responsibilities that would shift onto e-commerce operators have not been finalised or notified. These are exactly the points the GST Council is expected to take up, and the final notified scheme could differ materially from what has been reported in the run-up to the meeting. Readers should treat any specific numeric threshold or eligibility condition circulating before formal notification as provisional.

Frequently asked questions

Will Amazon and Flipkart sellers soon need only one GST registration for the whole country? Not yet. A proposal for a simplified single-state registration mechanism for eligible small e-commerce suppliers is reported to be before the GST Council for its meeting expected around 12 September 2026. It has not replaced the existing multi-state registration requirement, which continues to apply until formally notified.

Does this proposal reduce the GST a seller pays? No. The proposal, as reported, addresses registration and state-level compliance overhead, not the rate of GST or the total tax payable on sales. A seller's GST liability on taxable supplies is unaffected by where they are registered.

Can a seller currently avoid registering in a state just because inventory sits in a marketplace warehouse there? No. Under the existing framework, a marketplace warehouse used to store a seller's stock can trigger a registration requirement in that state. This continues to apply until a notification changes it.

Who would qualify if the scheme is notified? Reports indicate the facility is intended for micro and small e-commerce suppliers, with a turnover threshold and other conditions still to be prescribed. Large sellers with existing multi-state infrastructure are not expected to be the primary beneficiaries.

Should a seller cancel any existing state GST registration now? No. Existing registrations should be maintained until the scheme, if approved, is formally notified and transition rules are published. Cancelling registration in anticipation of a proposal carries real compliance risk.

Disclaimer

This post is for general information and does not constitute professional advice. It reflects the position of law as on 8 September 2026 and may not account for subsequent amendments, notifications or judicial developments. Tax and regulatory outcomes depend on the specific facts of each case. Readers should obtain advice appropriate to their own circumstances before acting on anything stated here.

Law stated as on 8 September 2026.