Major E-Commerce GST Rule Changes in India: What Sellers Must Know for 2025–2026
India’s e-commerce ecosystem is entering a stricter compliance phase as recent GST reforms focus on transparency, technology-driven reporting, and tighter seller accountability. The latest changes impact registration norms, e-invoicing timelines, tax collection at source, and input tax credit eligibility for online sellers nationwide.
Key E-Commerce GST Changes & Compliance Updates
Mandatory ISD Registration for Multi-GSTIN Businesses
According to recent reports, businesses operating multiple GST registrations under a single PAN must register as an Input Service Distributor (ISD).
This requirement applies to shared service expenses such as marketing, logistics, and technology costs across states, increasing reporting discipline for large e-commerce sellers.
Stricter E-Invoicing Timelines for High-Turnover Sellers
E-commerce sellers exceeding ₹10 crore in Annual Aggregate Turnover (AATO) must now report e-invoices to the Invoice Registration Portal (IRP) within a 30-day time limit.
Delayed reporting may lead to invoice invalidation, ITC restrictions, and reconciliation issues.
Updated GSTR-7 and GSTR-8 Reporting Formats
Effective from early 2025, GSTR-7 (TDS) and GSTR-8 (TCS) filings require invoice-level disclosure.
This change strengthens transaction-level transparency between sellers, marketplaces, and tax authorities, reducing mismatches during audits.
TCS Compliance Tightened for E-Commerce Platforms
E-commerce operators will continue deducting 1% TCS before settling payments to sellers. However, new compliance measures include:
- Real-time tracking of TCS deductions
- Shorter timelines for TCS deposit and reporting
- Automated matching of TCS data with seller GST returns
These updates aim to minimise reconciliation errors and improve compliance visibility.
18% GST on Platform-Based Delivery Services
From late 2025, platform-managed delivery services provided by quick-commerce and e-commerce players will attract 18% GST.
This applies to last-mile delivery services offered through digital platforms, affecting cost structures for food delivery, grocery, and hyperlocal sellers.
Biometric Authentication for GST Registration
Mandatory biometric verification has been introduced for directors and authorised signatories during GST registration and updates.
The measure is designed to curb identity misuse and shell registrations, especially in high-volume e-commerce operations.
Simplified GST Registration for Small E-Commerce Sellers
Earlier this year, the GST Council gave in-principle approval for a simplified registration mechanism for small e-commerce suppliers operating across states.
From November 2025, eligible sellers can expect reduced documentation and faster onboarding without compromising compliance oversight.
Revised E-Way Bill Validity Rules
E-way bill validity is now limited to 180 days, with extensions capped at 360 days.
This change ensures tighter logistics tracking and discourages misuse of long-validity transport documents.
Stricter Input Tax Credit (ITC) Eligibility
ITC claims for e-commerce sellers are now subject to enhanced scrutiny.
Credits can only be availed if the supplier has accurately reported the transaction, reinforcing dependency on clean upstream compliance.
Operational Impact on E-Commerce Businesses
These reforms signal a shift toward real-time tax monitoring and automated compliance.
Sellers must invest in stronger accounting systems, GST reconciliation tools, and compliant invoicing workflows to avoid penalties and credit losses.
What E-Commerce Sellers Should Do Next
- Audit GST registrations and ISD applicability
- Review e-invoice generation and reporting timelines
- Monitor TCS deductions daily
- Strengthen supplier compliance checks
- Update logistics and delivery GST treatment
Frequently Asked Questions
Is GST registration mandatory for all e-commerce sellers now?
Yes. E-commerce sellers are generally required to register for GST, regardless of turnover, with limited exceptions under specific schemes.
What happens if e-invoices are reported after 30 days?
Late reporting may lead to invoice invalidation, ITC denial, and compliance notices from tax authorities.
Does the 18% GST apply to all deliveries?
The 18% GST applies to delivery services facilitated by platforms, not seller-managed logistics in all cases.
How does biometric authentication affect GST registration?
Biometric verification improves identity validation and reduces fraudulent GST registrations during onboarding or updates.
Will small sellers benefit from simplified registration?
Yes. The simplified mechanism reduces documentation while retaining compliance checks for cross-state sellers.
Final Takeaway
India’s evolving GST framework signals a long-term shift toward automated, transparent, and tightly monitored e-commerce taxation. Digilogy tracks these regulatory developments closely, helping businesses stay informed as compliance standards continue to evolve across digital commerce ecosystems.
