Selling into India: GST, Non-Resident Registration and Market Access

India is one of the fastest-growing consumer markets in the world, and one of the most procedurally demanding to enter. Since 2017 it has run a unified Goods and Services Tax (GST) that replaced a patchwork of central and state levies. GST is a destination-based tax administered jointly by the central government and the states, and from 22 September 2025 it operates on a simplified structure: a nil rate, a 5% rate, a standard 18% rate, and a 40% rate reserved for luxury and so-called sin goods. Most consumer products sit at 5% or 18%.

What makes India distinctive is not the rate table. It is that tax compliance and market access are tightly bound together: who is allowed to sell, through what structure, and which registration applies are decided as much by foreign-investment law as by the tax code. A foreign seller who treats India as “just another VAT country” will be stopped at the first onboarding screen of every marketplace.

How GST applies across borders

GST has three components. Within a state, a sale carries CGST (central) plus SGST (state). Across state lines — and on imports — it carries a single IGST (integrated GST). Because most e-commerce orders ship from one state to a customer in another, the tax that an online seller charges is, in practice, almost always IGST, and invoices must reflect that correctly.

For a domestic business there is a turnover threshold below which GST registration is optional. That relief does not apply to anyone selling through an e-commerce operator. Any seller supplying goods through a marketplace must be GST-registered regardless of turnover — from the first rupee. For a foreign business the threshold question is therefore moot: if you intend to sell online in India, you will be registered.

The Non-Resident Taxable Person regime

India’s tax code has a dedicated category for foreign businesses: the Non-Resident Taxable Person (NRTP) — a person who occasionally supplies goods or services in India but has no fixed place of business there.

Registration as an NRTP runs through FORM GST REG-09 and carries requirements that have no equivalent in Europe:

The applicant must designate an authorised signatory who is resident in India and holds a valid PAN (Permanent Account Number). India insists on an enforceable, locally resident counterpart for the tax authority.
The NRTP must deposit tax in advance, equal to the estimated GST liability for the registration period, before activity begins.
The registration is granted for a defined period — at most 90 days, extendable once by another 90 days.

That time limit is the signal. The NRTP regime is designed for temporary or occasional supply — an exhibition, a seasonal campaign, a defined consignment — not for an open-ended e-commerce operation. A seller who wants a permanent Indian storefront usually needs a more durable structure.

The structural question: how a foreigner is allowed to sell

This is the part most overlooked by sellers planning their entry, and it is decisive.

India’s foreign-investment rules draw a hard line in e-commerce. Foreign capital is permitted, up to 100%, in the marketplace model — a platform that connects buyers and independent sellers. Foreign capital is not permitted in the inventory-based B2C model, where the e-commerce entity owns the goods it sells to consumers. A foreign company therefore cannot simply hold stock in India and retail it directly to Indian consumers under its own name.

The consequence on the ground is that the large marketplaces — Amazon India, Flipkart and others — onboard only an Indian-incorporated seller: an entity with an Indian legal address and an Indian GSTIN. That reality shapes every realistic entry route:

Incorporate an Indian subsidiary (typically a private limited company) that becomes the seller of record, holds the GST registration, imports the goods, and lists on the marketplaces. This is the cleanest path for a brand committed to the market.
Sell through an Indian distributor or an Importer of Record who buys, imports and resells — the foreign brand stays one step back from the consumer-facing tax obligations.
Use the NRTP regime for genuinely time-limited supply, accepting its 90-day horizon.

Choosing among these is a tax, corporate and FDI decision at once, and getting it wrong is expensive to unwind.

E-commerce TCS: tax collected on your behalf

Indian marketplaces operate a Tax Collected at Source (TCS) mechanism. The e-commerce operator withholds 0.5% of the net value of taxable supplies made through it — 0.25% central, 0.25% state — and pays it to the government against the seller’s account. The seller then claims that amount as a credit in its GST returns.

TCS is not an extra cost; it is a withholding. But it makes registration unavoidable — you cannot reconcile and reclaim TCS without being GST-registered and filing returns — and it gives the tax authority a complete, platform-reported record of your sales. The monthly compliance cycle (sales return, summary return, and the annual return) is the routine price of selling online in India.

Digital services: the OIDAR route

A foreign business selling digital products or services to Indian consumers — software, streaming, online courses, e-books — falls under the OIDAR rules (Online Information and Database Access or Retrieval). Such a provider must register in India and account for GST, generally at 18%, on its B2C supplies to Indian consumers. This is a separate, simplified track from the NRTP goods regime, and a business that sells both goods and digital services needs to map each flow to the right registration.

A note on a recent change: India’s equalisation levy — the 6% charge on online advertising and the 2% charge on e-commerce supply by non-residents — has been wound down, with the e-commerce component removed in 2024 and the advertising component in 2025. The levy that once shadowed every cross-border digital sale is no longer a live concern.

Imports: high duties and no commercial de minimis

Goods entering India are assessed Basic Customs Duty, a Social Welfare Surcharge, and IGST on the landed value. Indian customs duties are, by international standards, high — for many consumer categories the effective import burden is substantial — and India has no meaningful commercial de minimis: a small bona-fide gift exemption exists, but ordinary commercial parcels are dutiable from the first rupee of value. Pricing for the Indian market has to be built around the landed cost, not the ex-works cost, and the choice of Importer of Record and Incoterms is central to the model.

Two typical scenarios

A brand committed to India for the long term. It incorporates an Indian private limited company, which obtains a GSTIN, becomes the Importer of Record, holds stock in India, and lists on Amazon India and Flipkart as a compliant Indian-incorporated seller. GST is charged as IGST on interstate orders; the marketplaces withhold 0.5% TCS, reclaimed in the monthly returns.

A foreign company testing the market or supplying for a defined campaign. The NRTP regime fits — REG-09 registration, a resident authorised signatory with a PAN, an advance tax deposit, and a 90-day window. It is a controlled, time-boxed entry, not a permanent storefront, and it buys time to decide whether to incorporate.

How Servix International helps

India rewards sellers who get the structure right before they get the listing live. As the global division of an Italian regulated accountancy firm with more than 20 years of cross-border practice, Servix International advises foreign e-commerce operators on the route that fits their ambition: NRTP registration where supply is genuinely temporary, Indian subsidiary incorporation and GSTIN registration where the market warrants a permanent presence, OIDAR registration for digital services, and the customs and Importer-of-Record planning that decides landed cost. One regulated partner to align the tax, corporate and foreign-investment questions that, in India, can never be answered separately.