Is GST registration necessary for E Commerce business?

864 votes

As an E-Commerce business can be started in anyone off the following business model:-
1. Proprietorship firm
2. Partnership firm registration
3. Private Limited Company
4. LLP (Limited Liability Partnership)
5. One person company
After deciding the Structure of business one like to choose for E-commerce business one needs to follow the following steps –
II. Registration of the Domain name

To attain the security for the domain name under the Intellectual Property Rights, one need to choose a unique name and get it trade Mark registration.
III. Attain a privacy policy
Attaining a well drafted privacy policy is a must for every E-commerce portal to prevent itself from being sued under Section 43A of the Information Technology Act, 2000 where penalty can reach up to 5 crores.
IV. Draft the Website Terms and Conditions
For any website to work it is very essential to draft the terms and conditions agreement which would usually cover all the user covenants and company covenants in order to restrict the liability of E-commerce website in every way possible.
V. Make a Vendors Agreement
Making an agreement for vendor with well defined clauses and terms to deal with problems like default in product, late delivery, lack in quality etc and many other provisions which can be included keeping in mind the business model.
One also needs to obtain the Payment gateway and Logistics for E-commerce business
In India we basically have 2 types of Payment Gateways :-
1. With no setup fees- Popular but have higher TDRs (examples are Payumoney, Paypal etc)
2. With setup fees – Less TDRs and faster processing (examples are Payu, Ccavnue)
The documents that need to submitted for obtaining a payment gateway
1. Bank account in the name of the business
2. PAN Card of the business
3. Certificate of Incorporation
4. Memorandum of Association
5. Articles of Association
6. Identity Proof
7. Address Proof
8. Website Terms of Use
9. Website Privacy Policy
VI. User agreement and Data Security
We have been seeing that most companies do not feel any significance to invest in Cyber Security in the beginning of their venture but after running the business for some time and facing the pros and cons of online business eventually do turn investing in cyber security to save itself from penalties or fines.
Apart from all this a User Agreement also needs to be drafted in such a manner that it proves to be beneficial both for the user and e-commerce company. It should be able to preserve the user rights and restrict the E-commerce portal as it serves as an Intermediary.

VII. Registration under GST which is also mandatory
mandatory

Advocate Abhinav Jain LawRato

869 votes

(1) my business based on marketing mobile app,what is the legal formality, permission and registration for this
no special permission required but ensure your website policies are strong and by all means you protect user data and don't use data for commercial transaction without there permission
(2) Is GST registration necessary for E Commerce business?
any small business upto 20 lacs turnover is not required compulsory registration, but need to follow other filing by laws
(3) can i do my business solo proprietorship ?
yes you can but risk is high, not recommended

Advocate Nischal Arvind Singh LawRato

582 votes

(1) my business based on marketing mobile app,what is the legal formality, permission and registration for this
register/ incorporate the entity under which you will be running the business, get domain name registration, trade mark registration, PAN Tan etc. , contracts with app developers, server hosts etc.
(2) Is GST registration necessary for E Commerce business?
Yes, subject to the relevant criteria for mandatory registration
(3) can i do my business solo proprietorship ?
Yes, but business houses may be reluctant to deal with a sole proprietor for e-commerce business

Advocate Joydeep Nath LawRato