GST for online sellers in India: registration, invoices and HSN codes

Short answer: most online sellers in India need a GST registration. Selling goods to buyers in another state makes registration compulsory whatever your turnover, and selling through a marketplace usually does too. Once registered, every sale needs a tax invoice that shows your GSTIN, the HSN code, the taxable value and the CGST + SGST (same state) or IGST (other state) charged.

This guide explains the rules in plain language, in the order a new seller meets them. It is general information, not tax advice: GST rules change through notifications, so check the official sources linked below and talk to a chartered accountant (CA) about your own business.

Do I need GST registration to sell online?

There are two ways you end up needing a GST registration: your turnover crosses the threshold, or your type of business makes registration compulsory from the first rupee.

1. The turnover threshold

If you only sell within your own state, you need to register once your aggregate turnover in a financial year crosses the threshold for your state. For suppliers of goods in most states the threshold is ₹40 lakh, for services it is ₹20 lakh, and several special category states have lower limits. The current limits for each state are listed on the GST portal.

2. Compulsory registration (Section 24 of the CGST Act)

Section 24 lists businesses that must register regardless of turnover. Two of them matter most to online sellers:

• Inter-state supply of goods. If you ship goods to a buyer in another state, you generally need a GST registration even if your turnover is small. For most online stores this is the rule that applies first, because a website takes orders from all over India.
• Selling through an e-commerce operator that collects TCS. Sellers on marketplaces that collect tax at source must usually register. Since 1 October 2023, Notification 34/2023-Central Tax exempts small sellers of goods who sell through a marketplace only within one state and meet its other conditions (including an enrolment number on the portal).

Selling on your own website is different from selling on a marketplace, but the inter-state rule still applies to you. If you plan to deliver outside your state, assume you need a registration and confirm it with your CA.

What must a GST tax invoice show?

Rule 46 of the CGST Rules lists what a tax invoice must contain. For a typical online order it means:

• Your business name, address and GSTIN.
• A consecutive invoice number (up to 16 characters, unique for the financial year) and the invoice date.
• The buyer's name and address. If the buyer is registered, their GSTIN too. For an unregistered buyer, the name, delivery address and state are required when the invoice value is ₹50,000 or more.
• The HSN code of each item (see below), a description, quantity and unit.
• The taxable value after any discount.
• The tax rate and tax amount, shown separately as CGST and SGST, or as IGST.
• The place of supply, with the state name, for inter-state sales.
• Your signature or digital signature.

The full text of the rules is on the CBIC GST site.

How many HSN digits do I need?

HSN (Harmonised System of Nomenclature) codes classify goods; SAC codes do the same for services. Since 1 April 2021 the number of digits depends on your aggregate turnover in the previous financial year:

Turnover in the previous year	HSN digits on the invoice
Up to ₹5 crore	4 digits (may be left out on invoices to unregistered buyers)
Above ₹5 crore	6 digits

Your HSN code also decides your GST rate, so get it right once per product. You can search codes on the GST portal's HSN search.

CGST + SGST or IGST: which one do I charge?

The place of supply decides it. For goods that you deliver, the place of supply is normally where the delivery ends, which for an online order is the buyer's shipping address.

• Buyer in your state: charge CGST and SGST, each at half the rate. An 18% item becomes 9% CGST + 9% SGST.
• Buyer in another state: charge IGST at the full rate, for example 18% IGST.

Getting this split wrong is one of the most common mistakes in manual invoicing, which is why your store software should do it from the shipping address.

Prices: inclusive or exclusive of GST?

Indian consumers expect the price on the product page to be the final price. Most stores selling to consumers show prices including GST and print the tax portion separately on the invoice. If you sell to businesses, you may prefer to show prices before GST. Decide once and keep every product consistent.

Common GST mistakes online sellers make

• Charging IGST on a local order, or CGST + SGST on an out-of-state one. The tax is then paid to the wrong government and has to be corrected, which takes time and paperwork.
• One GST rate for everything. Different products can carry different rates. Set the HSN code and rate per product rather than one store-wide rate.
• Gaps or repeats in invoice numbers. Invoice numbers must run in sequence for the financial year. Do not reuse a number after cancelling an order; issue a credit note instead.
• Forgetting tax on shipping charges. When you charge the buyer for delivery as part of the sale, that charge is usually taxed along with the goods. Ask your CA how it applies to your products.
• Not keeping records. Keep every invoice, credit note, payment gateway settlement report and courier invoice. They are what your CA needs to file returns, and what you need if an officer asks questions.

Returns, refunds and credit notes

When a buyer returns goods or you give a refund after the invoice was issued, you do not edit or delete the original invoice. You issue a credit note against it, which reduces the tax you owe for that sale. Make sure the credit note refers to the original invoice number and shows the same tax split.

A simple monthly GST routine

1. Export the month's invoices and credit notes from your store.
2. Download the payment gateway and courier settlement reports.
3. Check that every paid order has an invoice and every refund a credit note.
4. Send the files to your CA well before the return due dates shown on the GST portal.
5. Keep a copy of everything you send.

Ten minutes of checking each month avoids most of the problems that show up at year end.

How GST works in a CartWhizz store

CartWhizz handles the routine parts of GST for you:

• Each product has an HSN / HS code field, and the tax rate follows the product, so a 12% item is not charged at 18% by mistake.
• Tax is worked out from the shipping address: CGST + SGST for buyers in your state, IGST for other states. The cart, checkout and order use the same calculation, so the amounts match.
• Your order invoices show your GSTIN and print each tax head (CGST, SGST or IGST) as its own line. You can print an invoice from the order page or export several at once.

Software helps you charge the right tax; filing your GST returns and paying the tax is still your job (or your CA's). You can try CartWhizz free for 7 days on cartwhizz.com/start.

Frequently asked questions

Is GST registration required for selling on my own website?

Often yes. If you deliver goods to buyers in other states, registration is compulsory under Section 24 of the CGST Act whatever your turnover. If you only sell within your state, you need to register once your turnover crosses your state's threshold. Confirm with a CA.

Can I sell online without GST?

Only in limited cases: for example, a seller of goods with turnover below the threshold who sells only within one state, or a small marketplace seller covered by Notification 34/2023. Most online stores that ship across India need a registration.

What is the GST rate on my products?

It depends on the product's HSN code. Look up the code and its rate on the GST portal or ask your CA, then set it once on the product.

Do I need to show HSN codes on B2C invoices?

If your previous year's turnover was up to ₹5 crore, you may leave HSN out of invoices to unregistered buyers. Above ₹5 crore, show 6 digits on every invoice.

Sources

Official sources, checked 16 October 2026:

• GST portal
• Notification 34/2023-Central Tax (GST Council)
• CBIC GST: Acts, rules and notifications
• GST portal HSN/SAC search