New Tax GST 2.0: What E-Commerce Sellers on Amazon India, Flipkart, Myntra, and Others Need to Know from 22nd September 2025
India is bringing in a major tax reform on 22nd September 2025. This change, known as GST 2.0 India 2025, will directly impact online sellers on platforms such as Amazon India, Flipkart, Myntra, and others. Let’s break it down in the simplest way possible.
TL;DR
GST 2.0 India 2025 goes live on 22nd Sept 2025.
Only 3 tax slabs (5%, 18%, 40%) instead of 4.
Essentials & packaging get cheaper, apparel above ₹2,500 gets costlier.
Compliance made easier with a single GST number, pre-filled returns, and faster refunds.
Logistics costs fall due to lower GST on packaging & vehicles.
Marketplaces still deduct 1% TCS, impacting cash flow.
Sellers should reprice, update systems, plan inventory, and prepare for the festive season.
Quick Reference – What We’ll Cover
First, What is GST?
What Changes on 22nd September 2025?
Simpler Tax Rates
What Gets Cheaper and What Gets Costlier?
Lower Costs for Packaging & Shipping
Easier Compliance (Less Paperwork)
Impact on Services
Merits vs Demerits for E-Commerce Sellers
What Should Sellers Do Now?
The Bottomline
First, What is GST?
GST stands for Goods and Services Tax. It’s a single tax that applies when you sell goods or services in India. Instead of paying different taxes like VAT, excise, or service tax, sellers only pay GST.
GST Rate (or Slab): The percentage of tax charged on a product. For example, if GST is 18% on a shirt priced at ₹1,000, then ₹180 goes as tax.
ITC (Input Tax Credit): This means you can claim back the GST you paid on purchases (like packaging material or courier services) while paying GST on your sales. Think of it like adjusting your expenses against your earnings tax.
-Special note for online sellers: Unlike offline businesses, e-commerce sellers don’t get the basic ₹20 lakh exemption. Even if you sell just one product online, you must register for GST. Also, the simplified “Composition Scheme” (meant for small businesses with low turnover) is not available to e-commerce sellers.
What Changes on 22nd September 2025?
1. Simpler Tax Rates
Earlier, GST had four slabs (5%, 12%, 18%, 28%). Now, it has only three:
5% – for essential and daily-use items
18% – for most other products and services
40% – for luxury or harmful products (like tobacco, high-end liquor, or very premium goods)
- For sellers: Pricing is easier because you don’t need to juggle multiple tax brackets. The GST new tax slabs for September 2025 are meant to make the system simpler.
2. What Gets Cheaper and What Gets Costlier?
Cheaper: Food, personal care, basic appliances, and packaging materials → all now under 5% GST
Costlier: Apparel priced above ₹2,500 (tax rises from 12% to 18%). Premium items also see a higher tax.
- Expect higher demand for essentials, but some slowdown in fashion and luxury sales. This is one of the biggest GST changes for e-commerce sellers who sell apparel and premium categories.
3. Lower Costs for Packaging & Shipping
Packaging boxes, cartons, and wrapping papers now attract just 5% GST (down from higher rates). Since packaging is a big part of online selling, this means direct savings for sellers.
- Bonus: GST on trucks and vans has been reduced to 18% (from 28%), which can lower shipping costs, especially for small and medium sellers (MSMEs).
4. Easier Compliance (Less Paperwork)
Single-State Registration: You don’t need separate GST numbers for every state where you sell. One GST number works pan-India.
Pre-Filled Returns: Your GST returns will come pre-filled, making filing easier.
Auto Refunds: Refunds for excess tax paid will be faster, helping your cash flow.
- Remember: On marketplaces, platforms like Amazon India and Flipkart deduct 1% TCS (Tax Collected at Source) from every order. This goes directly to the government, and you can later claim it as credit — but it means your working capital is locked up until the credit is adjusted.
This is a key part of the GST impact on Amazon India , Flipkart Myntra sellers who already face tight margins.
5. Impact on Services
Services like courier, logistics, and job work are now either 5% (without ITC) or 18% (with ITC). This means you’ll need to check which category your service falls into. For example:
If you take a courier service that charges 18%, you can claim ITC and reduce your tax burden.
If a service is 5% without ITC, it’s cheaper upfront, but you can’t claim back the tax.
Merits vs Demerits for E-Commerce Sellers
What Should Sellers Do Now?
Reprice Your Products – especially fashion and premium items, to stay competitive.
Plan Inventory – clear old stock before 22 Sept to avoid confusion with old vs new rates
Update Your Systems – check with your accountant or software provider to update GST in invoices.
Use Cost Savings – highlight “free/low-cost shipping” by passing packaging savings to customers.
Prepare for Festive Sales – since this change happens right before Navratri and Diwali, demand for cheaper essentials may shoot up.
Keep Flexible Discounts – use coupons and vouchers instead of permanent markdowns, so you can adjust prices quickly if tax slabs change.
Strengthen Refund Policies – be clear with customers about refunds/exchanges in case of mid-sale tax confusion.
Document Everything with Platforms – if Amazon India/Flipkart makes a GST mistake, sellers can face penalties. Keep contracts and records updated to protect yourself.
The Bottomline
GST 2.0 is designed to make the tax system simpler and encourage more consumer spending. For e-commerce sellers, this means:
Good news if you sell essentials, FMCG, or low-priced products
Tougher margins if you focus on fashion or luxury
Extra compliance pressure with TCS deductions and no threshold exemption
Overall, if you adapt quickly with the right pricing and inventory moves, GST 2.0 could actually boost your festive sales. These GST reforms for online sellers are all about staying agile and turning challenges into opportunities.
