• June 16, 2023

The advent of e-commerce platforms has revolutionised how businesses operate, allowing entrepreneurs to reach a global customer base with relative ease. However, with the implementation of Goods and Service Tax (GST) in many countries, including India, the online seller faced new challenges.

Following the GST’s implementation in India, we adhere to the One Nation – One Tax principles. In India, 17 different indirect taxes must be paid before 2017.
All goods and services are uniformly taxed across the nation under the GST system. The amount of taxes that businesses were required to pay has significantly decreased. You can manage all tax information online for your WooCommerce store with the GST plugin for WooCommerce.

In this blog, we will explore the impact of GST on online sellers and provide valuable insights for e-commerce platforms to assist their sellers in navigating this tax landscape.

Increased Compliance Burden

GST brings the online selling community under the ambit of tax authorities, making compliance an essential aspect of their operation. Online sellers are now required to register for GST, file regular returns, and maintain proper records of their transactions. E-commerce platforms can support sellers by providing user-friendly tools and automated systems that simplify the compliance process, ensuring sellers can focus on their core business activities.

Determining GST Liability

One of the crucial aspects of GST for online sellers is determining their GST liability accurately. They involve the identification of the correct rate for their product, considering the place of supply rule, and understanding various exemptions and thresholds. E-commerce platforms can collaborate with tax experts to develop comprehensive guides and training materials to educate sellers about GST implications, helping them make informed decisions regarding their pricing strategies and product offerings.

Impact on Price and Profitability

GST can have an impact on the pricing and profitability of online sellers. While the input tax credit mechanism allows sellers to claim credit for taxes paid on their business expenses, it is essential to ensure that the increased compliance costs and potential changes in tax liabilities do not erode their profitability. E-commerce platforms can work closely with sellers to analyze the impact of GST on their pricing structures, offering guidance on maintaining competitiveness while remaining compliant. This plugin can help you in managing the price and profit. This plugin simplifies the process of calculating GST tax in WooCommerce.

Supply Chain Management

E-commerce platforms play a vital role in the supply chain management of online sellers. With the implementation of GST, sellers need to review and restructure their supply chain processes to ensure compliance and minimize potential disruptions. Platforms can assist sellers by facilitating collaborations with logistics partners and providing tools to track and manage the movement of goods, ensuring seamless operations while complying with GST requirements.

Tax Collection at Source (TCS):

Certain jurisdictions have introduced the concept of Tax Collection at Source (TCS) for e-commerce transactions. Under this mechanism, e-commerce platforms are responsible for collecting and remitting the applicable GST on behalf of the sellers. Platforms must develop robust systems to calculate and collect the TCS accurately, simplifying the process for sellers and ensuring compliance with tax regulations.

A GST on e-commerce businesses will simplify taxation

The procedures for submitting taxes have also been significantly changed by the introduction of GST. Owners of online stores today don’t have to stress about lengthy correspondence with tax authorities, delays, differences between state governments, etc.

Now, all compliances can be completed online.

The Indian government has created GST gateways that allow eCommerce business owners to:

Online registration is possible through specialised apps offered by GSTN and ST Suvidha Providers.

Instead of tracking them all at the end of the fiscal year, upload invoices immediately.

Self-declaration forms are used to submit refund claims online.

Every process has a planned and standardised timeline since every process is digitalized and automated.

GST Challenges for E-Commerce Marketplace Sellers

The Complexity of GST Rules

The intricacy of GST regulations may make it challenging for online marketplace vendors to comprehend and adhere to them, which can result in mistakes and fines.

High compliance expenses:

The GST mandates that merchants on e-commerce marketplaces register, file returns, and pay taxes regularly, which might raise their compliance expenses.

Lack of IT (Information Technology) infrastructure:

E-commerce marketplace vendors could not have the needed IT setup to abide by the digital system for billing and filing returns as required by GST.

Difficulty in claiming input tax credit:

Since they might not have the necessary paperwork or invoices to back up their claim, e-commerce marketplace sellers may encounter difficulties when claiming an input tax credit.

Difficulty in understanding the GST rates:

The different GST rates for various goods and services may be confusing to e-commerce marketplace vendors, which can result in mistakes with WooCommerce GST invoice
and tax payments.

Difficulty in dealing with multiple tax authorities:

GST makes it necessary for e-commerce marketplace sellers to communicate with numerous tax authorities, which can be tedious and confusing.

To overcome all these challenges install WooCommerce GST Plugin for your online store.
This GST plugin can automatically calculate GST and generates an invoice with GSTIN and HSN number. You can generate customised invoices with your store logo and company name.


The introduction of GST undoubtedly poses challenges for online sellers on e-commerce platforms. However, with the right support and guidance from the platforms, sellers can navigate this tax landscape effectively. By offering user-friendly compliance tools, educating sellers about GST implications, and facilitating streamlined supply chain management, e-commerce platforms can empower their sellers to thrive in the era of GST, fostering a vibrant and compliant online selling ecosystem.
Remember, a collaboration between e-commerce platforms, online sellers, and tax experts is crucial to understanding the nuances of GST and ensuring a smooth transition to the new tax regime. By embracing this collaborative approach, e-commerce platforms can reinforce their position as valuable partners for online sellers, helping them harness the opportunities presented by the digital economy while complying with tax regulations.