Amazon says I need GST, but GST law may not. Which one matters?

Which one decides whether you need GST?

There are two separate tests, and you have to pass both.

• The legal test. The CGST Act decides whether you are liable to register. If you are liable and do not register, you face tax, interest and penalties.
• The marketplace test. Amazon decides who can sell on its platform and in which categories. It can ask for a GSTIN even when the law does not, just as a landlord can ask for more documents than the law needs.

So "Amazon says I need GST" is not a legal ruling, and "the law says I don't" does not oblige Amazon to list you. The useful question is which route lets you sell what you want, legally, at the lowest ongoing cost.

When does GST law not require you to register?

Marketplace sellers are usually caught by Section 24(ix) of the CGST Act, which makes registration compulsory for anyone selling through an e-commerce operator that collects tax at source (TCS). There are three main ways out:

• Only exempt goods. Section 23(1)(a) says a person who supplies only exempt or non-taxable goods or services is not liable to register. No TCS arises on exempt sales, so the usual reading is that Section 24(ix) does not apply. Our guide on selling GST-exempt products on Amazon covers this in detail.
• The enrolment route for small goods sellers. Since 1 October 2023, Notification 34/2023-Central Tax lets a seller below the turnover threshold sell goods through e-commerce operators with an enrolment number instead of a GSTIN. You must sell in one state only, make no inter-state supplies, hold a PAN, and get the enrolment number on the GST portal before your first sale.
• Small service providers. Notification 65/2017-Central Tax exempts suppliers of services through e-commerce operators from compulsory registration while their turnover stays below the threshold.

Outside these routes, a marketplace seller of taxable goods needs a GSTIN from the first sale, whatever the turnover. See whether you can sell on Amazon without GST for the full picture.

When is GST compulsory even for a small seller?

Some situations remove the exemptions above:

• Selling to buyers in other states. The enrolment route allows no inter-state supply at all. One order shipped outside your state takes you out of it.
• Stock in another state. If your goods sit in a warehouse outside your home state, you have a place of business there and need a GSTIN in that state.
• Mixing taxable and exempt goods. The Section 23 exemption covers sellers of only exempt goods. Add one taxable product and you are back under Section 24.
• Crossing the threshold. Once your all-India turnover under the same PAN crosses the limit, the enrolment number stops being valid from the date your registration takes effect.

Why might Amazon still ask for a GSTIN?

Amazon's seller registration asks for a GSTIN by default. Its non-GST path is meant for sellers who list only GST-exempt categories. Amazon may also set its own conditions for enrolment-number sellers, such as which categories they can list in or whether they can use Fulfilment by Amazon.

Common reasons a seller who is legally exempt still gets asked for a GSTIN:

• The category you chose is treated as taxable on Amazon, even if one of your products is exempt.
• Fulfilment by Amazon may place your stock in warehouses in other states.
• Business buyers want a GST invoice so they can claim input tax credit.

Before you plan around a route, open the tax information step in Seller Central and see which options it offers for your category. That is Amazon's current policy, and it can change.

Which route fits your situation?

What does voluntary GST registration commit you to?

Section 25(3) of the CGST Act lets you register even when you are not liable. Once you do, you are treated like any other registered person:

• File GSTR-1 and GSTR-3B every period, monthly or quarterly under QRMP, even with no sales. Late returns attract late fees.
• Charge GST on every taxable sale and pay it through GSTR-3B.
• Accept marketplace TCS on the GST portal so it reaches your cash ledger.
• Claim input tax credit on Amazon's fees and your business purchases. For a seller with taxable goods, this often offsets much of the cost.

If you sell only exempt goods, voluntary registration adds returns without much benefit. You cannot charge GST on exempt sales, and credit on inputs used for them is blocked. Weigh that against the sales you would gain in the category. If you are setting up a company at the same time, see whether you need GST right after incorporation.

Can you cancel GST later if you stop selling taxable goods?

Yes. Section 29(1)(c) of the CGST Act lets you apply to cancel when you are no longer liable to register, and it also covers people who registered voluntarily and want to opt out. The old one-year lock-in for voluntary registrations was removed from Rule 20 on 23 January 2018.

You apply on the GST portal in Form GST REG-16. Before cancelling, plan for three things:

• File all pending returns and pay any tax due.
• Under Section 29(5), pay back the input tax credit on stock you hold on the day before cancellation, or the output tax on it if that is higher.
• File the final return, GSTR-10, within three months of the cancellation date or the cancellation order, whichever is later.

Tell Amazon before the cancellation takes effect, so your listings and tax settings match your new status.

What we'd check in your case

• Whether every product you plan to sell is exempt, taxable, or a mix.
• Where your buyers are, and whether you will ship outside your state.
• Whether you plan to use FBA and where Amazon may store your stock.
• What Seller Central offers for your category today: GSTIN, exempt option or enrolment number.
• The cost of quarterly or monthly returns against the sales a GSTIN opens up.

Send us your product list and the states you want to sell in on WhatsApp, and we will tell you which route fits. If a GSTIN is the right answer, see our GST registration service.

Related questions

See our service: GST registration for online sellers →

Sources

• Notification 34/2023-Central Tax: enrolment route for sellers through e-commerce operators
• Notification 65/2017-Central Tax: service providers through e-commerce operators
• CGST Act, Section 29: cancellation of registration
• Amazon Sell: GST-exempted categories on Amazon

General information based on rules as of November 2026, not legal or tax advice for your specific case. Rules change; we confirm what applies to you before any filing.