The Central Board of Indirect Taxes and Customs (CBIC) is preparing a proposal to allow small e-commerce sellers to register under GST in just one state, rather than every state they supply to. Currently, sellers must register wherever they make taxable supplies, creating compliance burdens. The proposed single-state registration scheme aims to lower barriers for small digital traders, expand the formal economy, and is expected to be placed before the GST Council for approval.

Under the existing GST framework, any supplier selling goods or services through an e-commerce operator (like Amazon or Flipkart) is mandatorily required to register under GST regardless of turnover threshold — the standard exemption of ₹40 lakh (goods) or ₹20 lakh (services) does not apply to them. Further, if they supply across multiple states, they must obtain separate GST registrations in each state. For a small seller earning modest revenues, managing registrations, filings, and compliance in multiple states is prohibitively complex and costly.

The proposed single-state registration scheme would allow such sellers to register only in their home state and still legally sell nationwide through e-commerce platforms. The compliance burden would shift largely to the e-commerce operator, who already collects Tax Collected at Source (TCS) at 1% (0.5% CGST + 0.5% SGST) on behalf of sellers and remits it to the government.

This reform is significant because it addresses a structural barrier to digital financial inclusion — small artisans, weavers, and micro-entrepreneurs who could benefit most from e-commerce remain outside the formal economy because multi-state GST compliance is unaffordable. CBIC's role here is advisory to the GST Council, which is the constitutional body (Article 279A) that decides GST policy. The GST Council is chaired by the Union Finance Minister and includes state finance ministers. Any change in GST law requires Council recommendation followed by legislative amendment in both Centre and states.