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

Most online sellers in India need a GST registration. If you sell goods to buyers in another state, registration is compulsory whatever your turnover, and selling through a marketplace usually makes it compulsory too. Once you are registered, every sale needs a tax invoice with your GSTIN, the HSN code, the taxable value and the tax charged: CGST + SGST for a buyer in your state, IGST for a buyer in another state.

Below are the rules in plain language, in the order a new seller runs into them. This 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?

You end up needing a GST registration in one of two ways. Either your turnover crosses the threshold, or your type of business makes registration compulsory from the first rupee.

1. The turnover threshold

If you sell only within your own state, you have to register once your aggregate turnover in a financial year crosses your state's threshold. In most states that is ₹40 lakh for suppliers of goods and ₹20 lakh for services, and several special category states have lower limits. The GST portal lists the current limit for each state.

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

Section 24 lists the 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 with a small turnover. For most online stores this is the rule that bites 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 usually have to 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.

Your own website is treated differently from 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 sets out what a tax invoice must contain. For a typical online order that comes to:

• 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, plus their GSTIN if they are registered. 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.

You can read the full rules on the CBIC GST site.

How many HSN digits do I need?

HSN (Harmonised System of Nomenclature) codes classify goods, and SAC codes do the same for services. Since 1 April 2021, the number of digits you print 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

The HSN code also decides the GST rate, so take the time to get it right once for each product. You can look codes up with the GST portal's HSN search.

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

It depends on the place of supply. For goods you deliver, that is normally where the delivery ends, which for an online order means 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.

Sellers who invoice by hand get this split wrong all the time. Your store software should work it out from the shipping address.

Prices: inclusive or exclusive of GST?

Indian consumers expect the price on the product page to be what they pay. Most stores that sell 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. Whichever you pick, use it for every product.

Common GST mistakes online sellers make

• Charging IGST on a local order, or CGST + SGST on an out-of-state one. The tax then goes to the wrong government, and correcting it takes time and paperwork.
• Using one GST rate for everything. Different products can carry different rates, so set the HSN code and rate on each product instead of one rate for the whole store.
• Gaps or repeats in invoice numbers. Invoice numbers have to run in sequence for the financial year. Don't reuse a number after you cancel an order; issue a credit note.
• 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 this works for your products.
• Not keeping records. Keep every invoice, credit note, payment gateway settlement report and courier invoice. Your CA needs them to file returns, and you need them if an officer asks questions.

Returns, refunds and credit notes

If a buyer returns goods or you refund them after the invoice has gone out, leave the original invoice alone. Don't edit or delete it. Issue a credit note against it, which reduces the tax you owe on that sale. The credit note should refer to the original invoice number and show 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 has 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 heads off most of the problems that otherwise turn up at year end.

How GST works in a CartWhizz store

CartWhizz takes care of the routine parts of GST:

• Each product has an HSN / HS code field and its own tax rate, so a 12% item doesn't get 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 all use the same calculation, so the amounts match.
• Order invoices show your GSTIN and print each tax head (CGST, SGST or IGST) on its own line. You can print an invoice from the order page or export several at once.

The 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 at 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, Section 24 of the CGST Act makes registration compulsory whatever your turnover. If you sell only 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 a few cases. A seller of goods whose turnover is below the threshold and who sells only within one state can, and so can 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?

That 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 turnover last year was up to ₹5 crore, you may leave HSN off 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