GST Registration for Small E-commerce Sellers: 57th Council Proposal

Small sellers often use an e-commerce operator's warehouse outside their home state. At its 8 October 2026 meeting, the GST Council recommended a simplified registration mechanism for eligible sellers in states or union territories where they have no physical presence. The proposal would be implemented through a new Rule 14B; it is not an application route to assume is live today. Source: Council recommendations. For the wider meeting, read our 57th GST Council overview.

What the Council proposed

The proposed route concerns small suppliers of goods through an electronic commerce operator (ECO). Where the seller has no physical presence in a state or union territory, the seller could declare the ECO warehouse there as its principal place of business. The recommendation applies where the seller intends to pass on no more than ₹2.5 lakh of ITC per month, excluding stock transfers between distinct persons. Registration would be system-granted subject to conditions. Source.

The official FAQ describes additional proposed controls: biometric Aadhaar authentication and physical verification in the home state, goods supplied exclusively through the ECO platform under this registration, and one registration per PAN in a state or union territory. The release says "not more than" ₹2.5 lakh, while the FAQ says "less than" ₹2.5 lakh; the notified rule must settle the precise threshold before anyone relies on it.

This could reduce the practical friction of establishing a separate business location solely to hold inventory in another state. It does not remove the need to assess registration, invoicing, place of supply, stock transfers or return obligations under the law that applies at the time of a transaction. Registration liability under the current law is in section 22 and section 24 (compulsory registration in certain cases) of the CGST Act.

How sellers can prepare

Map each state in which your goods are stored and identify the ECO warehouse used. Reconcile stock transfers, sales and ITC data by GST registration. Estimate the monthly ITC your business expects to pass on, and retain warehouse agreements and fulfilment records. When the rules and portal workflow are notified, verify the eligibility conditions and the exact documents required before applying. For help with a registration under the current rules, see our GST registration service.

Sellers already registered in multiple states should not cancel an existing GSTIN solely because this proposal was announced. The Council also proposed a separate phased simplification for cancellation; that process has its own conditions. The current cancellation provision is section 29 of the CGST Act. Source: Ministry of Finance release.