GST Compliance For E-Commerce \u2014 What Your Store Needs From Day One

GST compliance is one of the most overlooked aspects of Indian e-commerce stores. We see stores launching without proper invoicing, without tax calculation logic, and without the infrastructure to handle returns and chargebacks correctly.

Here\u2019s what your store actually needs.

GST On Product Sales

Every product sold in India must have the correct GST rate applied at checkout. The rates depend on the HSN code of the product:

• 5%: Essential items (certain food items, medicines)
• 12%: Computers, processed food
• 18%: Most consumer goods, electronics, furniture
• 28%: Luxury items, automobiles, tobacco

Your store needs a tax engine that maps each product to its correct HSN code and GST rate. Most platforms have basic tax settings, but they break when products span multiple GST slabs or when you sell to customers in different states.

IGST vs CGST + SGST

If you sell to a customer in the same state as your business, you charge CGST (Central GST) + SGST (State GST), split evenly. If you sell to a customer in a different state, you charge IGST (Integrated GST) at the full rate.

Your store must detect the customer\u2019s shipping state and apply the correct tax structure automatically. This is surprisingly uncommon \u2014 many stores apply a flat rate and fix it manually at invoicing time.

E-Commerce Operator Rules (TCS)

If you operate an e-commerce marketplace or allow third-party sellers on your platform, you\u2019re required to collect Tax Collected at Source (TCS) at 1% (CGST 0.5% + SGST 0.5%). This is a compliance requirement that many small platforms miss.

GST Invoicing

Every order needs a GST-compliant invoice that includes:

• Your GSTIN and the customer\u2019s GSTIN (if registered)
• Invoice number and date
• HSN code for each product
• Taxable value, GST rate, and amount (CGST + SGST or IGST)
• Place of supply (customer\u2019s state)

We build GST-compliant invoicing into every project from day one. It\u2019s not something you add later \u2014 the tax logic needs to be in the database architecture, the checkout flow, and the invoice generation system from the start.

The Bottom Line

GST compliance is complex, but it\u2019s not optional. Stores that ignore it face penalties, blocked shipments, and unhappy customers. The right approach is to build it into your platform architecture from day one \u2014 not retrofit it after your first tax notice.