When you sell products on Amazon, the Goods and Services Tax has the potential to change how you do business. The GST eliminates all other taxes, including VAT and state taxes, so it’s a breeze to ship across state lines or internationally. Although Amazon does its best to help you stay compliant, it’s important to understand how GST for Amazon seller works. That way, you can adjust your prices and accounting systems accordingly.
Which Amazon Sellers Need to Register for GST?
The GST law requires all online sellers to register for GST and file returns each month. It doesn’t matter if you make Rs 1,00,00 or Rs 10,00,000, you still need to pay GST. Amazon controls this by requiring all of its sellers to provide a GSTIN to keep doing business.
The only way you can get out of paying GST on your Amazon sales is if all of your products are exempt from the tax. Items that qualify include animal feed, the Indian flag, Khadi yarn, and plastic bangles. If you think you might want to branch out beyond GST-exempt products in the future, it’s still a good idea to register.
How to Register for GST?
Registering for GST is easy, thanks to the government’s GST portal, which allows you to complete the entire process online. First, you need to get a Temporary Registration Number (TRN) using your mobile number, email, and company’s Permanent Account Number. Then, you can use your TRN as a login to start the application. You have 15 days to submit your GST application before your TRN expires.
To make it easier to fill out your application, be prepared with these additional items:
- Proof of your place of business: For Amazon sellers, this may be your home. Accepted documents include electricity bills, property tax receipts, Municipal Khata copies, deeds, or rent agreements.
- Bank account number: This must be from India.
- Goods and services list: The list should include all of the things you sell on your Amazon account.
Creating GST-Compliant Invoices for Amazon Sales
GST affects how you invoice your Amazon customers. There are two types of invoices you might need:
- Taxable invoice: This invoice charges tax to your buyer and includes the required GST information.
- Bill of supply: Use this invoice when shipping GST-exempt products.
If your Amazon listings are Easy Ship or Self Ship, you can use the platform’s convenient invoicing tool. It automatically generates a GST-compliant invoice and adds the correct GST rate for the product type. This option is ideal if you’re a casual seller. When you’re running a full-fledged Amazon business, you can generate invoices using a third-party accounting software like QuickBooks Online. This makes record keeping easier and more accurate. To reconcile your accounting with Amazon’s, you can download a consolidated transaction report from Seller Central.
How to Handle Amazon Returns?
Returns are a normal part of business on Amazon. But what happens to the GST you already paid? The GST system makes this easy. As an Amazon seller, you need to file the GSTR-1 form each month. This is where you report invoices, sales, and the GST you charged buyers. When you have sales returns, you can simply add them to this form. That way, you can receive a credit for the tax you paid. These forms must be filed by the 10th of each month.
For many Amazon sellers, GST has the potential to streamline sales. When you understand the basics and check Amazon’s A-to-Z GST Guide frequently for updates, you can stay compliant as you build your business.