GST registration for dropshipping businesses

Work out your role first

• You buy from the supplier and sell to the customer in your own name: you are a trader of goods, and inter-state sales make registration compulsory
• You only earn a referral commission and the supplier bills the customer directly: your income is a service, and the Rs. 20 lakh services threshold applies (Rs. 10 lakh in Manipur, Mizoram, Nagaland and Tripura)
• You sell through a marketplace that collects TCS: the e-commerce rules apply, including compulsory registration unless the small intra-state seller enrolment route is available

Bill-to ship-to transactions

When you sell in your own name, two supplies take place: the supplier sells to you and you sell to the customer, while the goods move once, from the supplier to the customer. The supplier's invoice is billed to you and shipped to your customer; your invoice is billed and shipped to the customer.

Place of supply for the supplier's sale to you is based on your location as the buyer who directs delivery, and for your sale on the customer's delivery address. Getting this right decides whether IGST or CGST plus SGST is charged. The e-way bill, where needed, records both parties.

Common dropshipping mistakes

Many dropshippers run a website with a national reach but no GSTIN, assuming that not holding stock means no GST. Since they invoice customers in other states, registration was compulsory from the first order. Others buy from unregistered suppliers and then cannot claim input tax credit. Where products are shipped from abroad straight to Indian customers, customs and import rules come in as well, and the structure needs separate review.

Getting registered

Your principal place of business can be your office or home from where you run the store, supported by the usual address proof. You do not need a warehouse. Keep supplier agreements, order data and payment gateway settlements so the department can follow each order. A CA can review your model, register you and set up invoicing that works with your suppliers.

Get it handled for you

Need GST registration done right the first time? Our chartered accountants prepare the documents, file the application and handle any query, so you do not have to visit the GST office. Call or WhatsApp +91 63677 44602, or use the form below.

This guide explains the law in general terms as of October 2026. Time limits and requirements can depend on the facts of your case and on the notice you received.