Can I Sell on Amazon Without a GST Number?

Selling on Amazon has become a lucrative opportunity for individuals and businesses alike, offering access to a vast customer base and a platform that facilitates smooth transactions. However, for sellers based in countries like India, compliance with tax regulations is a critical aspect of setting up a successful online business. One of the most frequently asked questions by potential sellers is: "Can I sell on Amazon without a GST number?"

Understanding GST and Its Importance

Goods and Services Tax (GST) is an indirect tax levied on the supply of goods and services. It was implemented to unify the tax structure across India, replacing various state and central taxes. For businesses, obtaining a GST number is essential as it allows them to collect tax from customers, claim input tax credit, and comply with the law.

Do You Need a GST Number to Sell on Amazon?

The necessity of a GST number depends largely on the type of seller and the nature of the products being sold. Here’s a detailed breakdown:

1. Individuals Selling as a Hobby: If you’re selling products as a hobby or on a very small scale, such as handmade crafts or second-hand goods, you might not need a GST number. In India, businesses with an annual turnover of less than INR 40 lakhs (20 lakhs for services) are exempt from GST registration under the GST Composition Scheme.

2. Businesses with a Larger Turnover: If your sales exceed the INR 40 lakh threshold (INR 20 lakh for service providers), you are required by law to register for GST. This applies regardless of whether you’re selling online or offline.

3. Selling Under a Brand Name: Even if your turnover is below the threshold, if you are selling under a brand name or trademark, GST registration becomes mandatory. This is because the sale of branded goods is subject to GST.

4. Selling Interstate: If you plan to sell your products to customers in different states within India, GST registration is compulsory, regardless of your turnover. Amazon, being an e-commerce platform, automatically facilitates interstate trade, necessitating GST compliance.

5. E-Commerce Sellers: According to Indian law, anyone selling through an e-commerce platform like Amazon must register for GST, even if their turnover is below the exemption limit. This is because e-commerce platforms are required to deduct TCS (Tax Collected at Source) on behalf of sellers, which requires the sellers to have a GST number.

Exceptions and Special Cases

While the general rule is that sellers on Amazon need a GST number, there are some exceptions:

• Selling Books: Books are exempt from GST in India. If you're exclusively selling books on Amazon, you may not need a GST number. However, it’s important to confirm whether your specific category of books is exempt from GST.

• Unregistered Individual Sellers: If you are an individual selling personal items occasionally and not running a business, you might be able to sell on Amazon without a GST number. Amazon might allow you to sell a limited number of items as an unregistered seller, but this comes with restrictions, and you might not be able to access all of Amazon's seller features.

The Impact of Not Having a GST Number

Selling on Amazon without a GST number can significantly limit your business opportunities. Here’s how:

1. Limited Access to Seller Features: Amazon offers a range of tools and features to help sellers grow their business, such as advertising options, Amazon Prime eligibility, and access to a wider customer base. Without a GST number, you may be restricted from using these features.

2. Restricted Selling Categories: Certain categories on Amazon require GST registration, and without it, you won’t be able to list products in these categories.

3. Difficulty in Expanding Your Business: Without GST registration, you cannot sell interstate, limiting your customer base to just your local area. This significantly hinders the growth potential of your business.

4. Compliance Issues: Operating without the required GST registration can lead to legal complications, including penalties and fines. It can also affect your credibility as a seller, as customers and business partners might prefer dealing with GST-compliant sellers.

How to Get a GST Number

If you plan to sell on Amazon and don’t already have a GST number, the process to get one is straightforward:

1. Register on the GST Portal: Visit the official GST portal (www.gst.gov.in) and complete the registration form. You’ll need to provide details such as your PAN (Permanent Account Number), Aadhaar, and business details.

2. Submit Required Documents: You’ll need to upload documents like proof of business registration, identity proof, and address proof.

3. Verification: After submitting your application, the GST portal will verify your details. If everything is in order, you’ll receive your GST number within a few days.

4. Update Your Amazon Seller Account: Once you have your GST number, update your Amazon seller account to ensure full access to all features and compliance with Indian tax laws.

Conclusion

While it is technically possible to sell on Amazon without a GST number in some very specific cases, doing so can severely limit your business potential and expose you to legal risks. For most sellers, especially those planning to grow their business or sell across states, obtaining a GST number is not only a legal requirement but also a strategic advantage. It allows you to operate fully within the law, access a wider range of selling tools, and provide a better experience for your customers.

If you’re serious about selling on Amazon, getting your GST number should be one of your first steps. It’s a straightforward process that opens the door to significant opportunities on one of the world’s largest e-commerce platforms.