India’s GST Council has backed a warehouse-based registration option for small online goods sellers and phased refund automation, aiming to ease interstate sales while retaining eligibility checks.
At its Oct. 8 meeting, the Council recommended adding Rule 14B to allow eligible sellers to declare an e-commerce operator’s warehouse as their principal place of business in a state or Union territory where they have no physical presence. The optional route covers goods sold through platforms required to collect tax at source.
Applicants would need regular GST registration in their home state. The monthly input tax credit they intend to pass on could not exceed ₹250,000, excluding stock transfers between distinct persons. A separate monthly cap of ₹250,000 would apply to output tax liability on supplies to registered persons, excluding recipients registered under the same PAN.
The platform would have seven working days to decide whether to consent to the warehouse being listed. Once it agrees, the seller’s home-state jurisdictional officer would handle any outstanding biometric Aadhaar authentication and physical verification.
The Council also recommended automatic refunds of excess balances in electronic cash ledgers. For acknowledged, low-risk claims involving zero-rated supplies or an inverted duty structure, its FAQ describes provisional refunds of 90% of the claim. For refund categories other than excess cash-ledger balances, the Council proposed shortening the deadline for issuing an acknowledgment or deficiency memo from 15 to 10 days; an application would be deemed acknowledged if neither is issued within 10 days of filing. The FAQ says refund changes would be introduced in two phases as systems become ready.
PTI reported an estimate of about 950,000 small sellers who could benefit; the GST Council has not released its own count. Sanjay Mangal, a member for GST at the Central Board of Indirect Taxes and Customs, told PTI on Oct. 22 that automated sanctions would apply to future refund claims, not those already pending.
The Council said its recommendations require relevant circulars, notifications or statutory amendments to take effect. Mangal told PTI that measures not requiring law changes were tentatively expected to begin Nov. 1, 2026, while changes requiring amendments were targeted for April 1, 2027.
