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’s what your store actually needs.
GST On Product Sales
Every product sold in India must have the correct GST rate applied at checkout. The rate depends on the product’s HSN code. Since GST 2.0 took effect on 22 September 2025 and removed the 12% and 28% slabs, the rates are:
- 0%: Some essentials, such as fresh paneer and individual health insurance
- 5%: Most packaged food and daily-use goods, and medicines
- 18%: Most other goods, including computers, laptops and electronics, and most services
- 40%: Luxury and “sin” goods, such as large cars and aerated drinks
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’s shipping state and apply the correct tax structure automatically. This is surprisingly uncommon — 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’re required to collect Tax Collected at Source (TCS) at 0.5% (CGST 0.25% + SGST 0.25%, or IGST 0.5% across states). It was 1% until July 2024. 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’s 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’s state)
We build GST-compliant invoicing into every project from day one. It’s not something you add later — 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’s 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 — not retrofit it after your first tax notice.