Legal requirements to start a e commerce website


What are the legal requirements for starting market place e- commerce website? Do the vendors also need their respective GST registration or the site's registration would work?

Answers (3)


271 votes

Requirement and mandates for supplies made through e-commerce operators are prescribed in Section 24(x) & Section 52 to the CGST Act, 2017.
Every e-commerce operator is required to take mandatory registration in terms of Section 24(x) to the CGST Act, 2017.
Section 52(1) provides that wherever operator provides a platform to other suppliers to make supplies i.e. where transaction takes place on an e-platform and e-commerce operator is only providing such platform for supply of goods or service, the e-commerce operator is required to collect [email protected]% on net value of supplies. As per Explanation to Section 52(1), net value means value of supply made through the platform less value of supplies returned to suppliers. As per Section 52(3), the aforesaid tax is to be paid to the Government before 10th of subsequent month. Thereafter, e-commerce operator is required to electronically furnish a statement containing details of outward supplies and returned supplies and amount collected as tax in Form GSTR-8. The tax collected as above shall be available as credit to suppliers based on aforesaid statement.

In view of the above as regards e-commerce operations are concerned, w.r.t. supply of goods & services through it, the registration of e-commerce operator is mandatory and the operator has been cast with the responsibility of deducting TCS from the suppliers. However, it is understood that the suppliers displaying products and services on the operators website are separate legal entities with their own independent business. The requirements of registration under Section 22 and payment of tax shall apply to such suppliers independently and liability to pay tax on their supplies whether through e-commerce portal or otherwise shall be always on such suppliers. E-commerce operator is not required to pay tax on the supplies made by other suppliers. Apart from the TCS collected above, taxability of commissions/ flow back of money to e-commerce operator and other transactions between e-commerce operator and suppliers have to be independently assessed.

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50 votes

1. It is noteworthy that you may incorporate either a company or proprietorship firm. Moreover, the Proposed E-Commerce enterprise have to ensure privacy protection, data protection, cyber security, confidentiality maintenance clause etc. As you will also require a payment gateways to undergo a transaction, so you need to file a company registration number, director/ shareholders details.
2. GST registration will be required for an e-commerce operator who owns, operates or manages digital or electronic facility or platform for electronic commerce and also for sellers registered with the e-portal.

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90 votes

Hello client hru
I have received it query regarding the requirement what ch is required to start the emarkiting e-commerce website to start your work as well as you want to knw tht about GST number as well. Yes the website as well as all the vendors need there own GST number .and other requirements for e-commerce site we need to knw what site Ur planning to start .

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