The GST Council is set to meet on October 7, 2026, to discuss a reform allowing small e-commerce sellers to operate across states with a single registration. The move aims to simplify compliance for roughly 9.5 lakh small businesses by removing the need for state-specific registrations. If approved, the policy could lower operational costs for sellers while increasing compliance responsibility for e-commerce platforms.
The GST Council is scheduled to meet on October 7, 2026, to deliberate on critical 'GST 2.0' reforms. A major highlight of this agenda is a proposal to simplify registration requirements for small e-commerce sellers. Currently, small businesses must obtain separate GST registrations in every state where they use a warehouse, creating a significant operational hurdle for those wanting to sell nationwide. The new proposal aims to allow these sellers to operate across India using a single primary GST registration, effectively leveraging e-commerce warehouses as their registered places of business in other states.
To maintain tax integrity, the proposal includes strict verification requirements. Sellers would need to undergo physical verification and biometric Aadhaar authentication in their home state before qualifying for this simplified status. This safeguard is intended to ensure that only genuine businesses can access the streamlined system. The policy is specifically designed for small suppliers who lack a physical footprint in every state, helping them reach a wider customer base without the heavy administrative load of multi-state tax compliance.
The proposed framework increases the operational role of e-commerce platforms. Under these new rules, platforms would take on higher compliance responsibilities, including the need to appoint authorized representatives in various states to coordinate with tax authorities. This shift effectively makes e-commerce platforms active facilitators of tax compliance, which may increase their operational costs. Platforms would also be responsible for reporting deactivated sellers and assisting in tax recovery efforts, ensuring the government maintains visibility into the supply chain of these smaller vendors.
While the move aims to ease business operations, it includes specific financial guardrails to prevent abuse. For instance, there are strict limits regarding Input Tax Credit—the tax credit businesses claim on their purchases. If a supplier’s monthly tax credit exceeds a set limit of ₹2.5 lakh, they must exit this simplified system and obtain regular registrations. Additionally, sellers are required to maintain standard GST registrations for any transactions conducted outside of these e-commerce platforms. This ensures that the simplified route is used exclusively for online sales, preventing potential misuse of the system.
The outcome of the meeting on October 7 will be a significant event for the small business ecosystem. If approved, this move could benefit an estimated 9.5 lakh small sellers currently struggling with the cost and effort of complying with complex, state-specific GST laws. For stakeholders, the next step is to monitor the final council guidelines, particularly the specific operational and verification requirements that platforms will need to implement to accommodate this simplified structure.