GST WEEKLY UPDATE :14/2025-26 (06.07.2025) By CA Vipul Khandhar

-By CA Vipul Khandhar

1. GST Registration Mandatory for E-Commerce Sellers:

1.  Compulsory GST Registration for E-Commerce Operators and Sellers

As per GST in India, e-commerce businesses are required to obtain GST registration irrespective of their turnover. Unlike existing businesses that qualify for the Rs. 40 lakh (for goods) and Rs. 20 lakh (for services) threshold, e-commerce sellers are mandated to have GST registration, irrespective of transaction volume.

2.  Mandatory Registration under GST under Section 24 of the Central Goods and Services Tax Act

According to the provisions of the GST Act, e-commerce entities that are mandatorily registered under the GST include:

– E-commerce operators: who provide platforms for sales (e.g., Amazon, Flipkart, Meesho16).

– E-commerce sellers: Who sell goods and/or provide services via online marketplaces.

– Service providers using e-commerce platforms: Freelancers through services offered on online platforms.

3.  Who Has GST Exemption Registration in E-Commerce?

Most e-commerce businesses have to register for GST; however, some businesses are still exceptions:

– Certain services such as passenger transport without registration or hotel rooms above 1,000 rupees/day shall be exempted.

     – Small-scale businesses or enterprises under the GST Composition Scheme e-commerce sellers were not qualified for the Composition Scheme in the past, but this has now changed with the amendment, so intra-state operation e-commerce businesses with sales or turnover greater than Rs. 1.5 crore can avail of it.

GST Compliance for E-Commerce Sellers:

1.   Filing GST Returns for E-Commerce Sellers

These e-commerce traders need to comply with the requirements of periodic GST return filings:

GSTR-1: Monthly or quarterly for less than Rs. 5 crores turnover for reporting outward supplies;

GSTR-3B: Monthly summary return;

GSTR-9: Annual returns under GST;

GSTR-8 (for e-commerce operators): Monthly returns for collection of TCS from sellers.

2.   Tax Collected at Source (TCS) under GST

E-commerce operators require a deduction of 1% TCS (0.5% CGST + 0.5% SGST) on the transaction value and remit such amount to the government. Such sellers could claim the TCS amount while submitting their GST returns.

3.   Input Tax Credit (ITC) for e-commerce sellers

Sellers of e-commerce sites are entitled to claim Input Tax Credit (ITC) on GST that is paid for various business expenditures. This includes expenses for warehousing and logistics, etc, and commissions on a platform from where goods are sold. However, ITC is unavailable against the purchases from unregistered suppliers.

Step-by-Step GST Registration Process

Enter the GST portal-www.gst.gov.in

Under ”New Registration,” fill out your application form (GST REG-01), which must contain the PAN, address of business, and banking information.

Upload the necessary documents, which include proof of business registration, PAN, Aadhaar, and bank statements.

Next, an ARN (Application Reference Number) is generated for tracking your application.

After approval, get GSTIN (Goods and Services Tax Identification Number) and start filing returns.

NO editable allowed in GSTR-3B return from july-2025 onwards:

Starting July 2025, taxpayers will no longer be allowed to manually edit the auto-populated values in Table 3 of GSTR-3B, which contains details of outward supplies and the corresponding tax liability. These values, sourced directly from GSTR-1, will become non-editable as part of a new compliance measure aimed at enforcing strict consistency between GSTR-1 and GSTR-3B. Any discrepancies between the two forms must be resolved through amendments in GSTR-1A before filing the GSTR-3B return.

This change will apply to returns filed for the period pertaining to July 2025, which are due in August 2025. The move is designed to reduce errors, mismatches, and potential revenue leakages by ensuring that tax liability reported in GSTR-3B matches the details submitted in GSTR-1.

In preparation for this change, taxpayers are advised to proactively match GSTR-1 entries with their internal sales registers, ERP systems, and e-invoicing data. If any errors or omissions are identified in the outward supplies reported in GSTR-1, corrections should be made using GSTR-1A prior to filing GSTR-3B. This amendment is in line with Sections 37 and 39 of the GST Act and Rules 59, 60, and 61 of the GST Rules, 2017.

2. Process for correction ininadvertently rejected invoices, debit notes, and credit notes in the Invoice Management System (IMS):

Q1. How can a recipient claim ITC for wrongly rejected invoices if GSTR-3B is already filed?

Answer: The recipient should ask the supplier to re-report the same invoice (without any changes) either in the same period’s GSTR-1A or in the amendment table of a future GSTR-1/IFF.

Once the supplier does this, the recipient can:

• Accept the invoice again on IMS
• Recompute GSTR-2B on IMS
• Avail the ITC based on the corrected record

The recipient gets the full ITC of the amended invoice since the original was rejected.

Note: This ITC will reflect only in the GSTR-2B of the concerned tax period.

Q2. Will this affect the supplier’s liability if they re-report the same invoice?

Answer: No, there’s no additional liability for the supplier. Why?

Because when the supplier re-reports the same record in GSTR-1A or the amendment table, the system takes only the delta (change in value). Since the re-reported invoice is identical to the original, the net liability change is zero.

Q3. How can a recipient reverse ITC for a wrongly rejected credit note after filing GSTR-3B?

Answer: In this case too, the recipient can:

1. Request the supplier to re-upload the same credit notein GSTR-1A or the amendment table of a future GSTR-1/IFF.
2. Accept the amended credit note on IMS
3. Recompute GSTR-2Bon IMS
4. The system will automatically reduce the ITC by the full valueof the amended CN (since the original was rejected).

Q4. Will re-reporting a credit note affect the supplier’s liability?

Answer: Initially, yes.

• When a credit note is rejected, the supplier’s liability temporarily increases, as the credit note is not considered.
• However, once the supplier re-reports the same credit note, the liability reduces againby the same value.

Final outcome: The supplier’s net liability remains unchanged in the long run.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.

(The author is a well known Chartered Accountant practicing in direct and indirect taxes)