Selling Online in India: GST Registration, Payment Gateway Charges and Shipping (2026)

Short answer: every online store in India needs three things set up before launch: the right GST position, a payment gateway, and a way to deliver. Most small stores that ship only within their own state can start below the GST threshold, but selling goods to other states means registering from day one. Gateways such as Razorpay, Cashfree, PayU and PhonePe charge about 2% a transaction plus 18% GST on that fee, and an aggregator such as Shiprocket handles couriers across India and abroad.

This guide takes the three decisions in the order a store owner meets them, with the rupee charges in one table and a launch checklist at the end. It is written for small and growing stores, especially in Kerala, that sell from their own website rather than only on Amazon or Flipkart.

Based on the CGST Act, the CGST Rules and CBIC notifications as of October 2026. This is general information, not tax advice: for your own position, ask a chartered accountant or GST practitioner.

Do you need GST registration to sell online?

It depends on how much you sell, where your customers are, and whether you sell through a marketplace.

• Turnover threshold. A business that supplies only goods must register once its annual turnover crosses ₹40 lakh. Kerala uses this limit. A few states, including Telangana and Puducherry, kept ₹20 lakh for goods, and some north-eastern and hill states have lower limits. For services the threshold is ₹20 lakh. (CGST Notification 10/2019.)
• Selling to other states. A business that ships goods to customers in another state must register regardless of turnover (Section 24 of the CGST Act). For most online stores this is the rule that matters, because a website takes orders from anywhere in India.
• Selling on Amazon, Flipkart or Meesho. Sellers on e-commerce marketplaces also have to register regardless of turnover, with one exception since 1 October 2023: a small seller who supplies goods only within one state, makes no inter-state sales and stays below the threshold can sell on a marketplace with an enrolment number instead, after declaring their PAN and address on the GST portal (Notification 34/2023-Central Tax).
• Selling services online, such as courses or consultations, follows the ₹20 lakh services threshold and different rules from goods.

In practice, most stores we set up register for GST before launch, because they want to ship across India, which requires it, and because many payment gateways and couriers ask for a GSTIN during onboarding.

Which documents do you need for GST registration?

For a sole proprietor or partnership, the usual documents are PAN, Aadhaar, a photograph, proof of the business address (a rent agreement or electricity bill) and bank account details; a company or LLP also needs its incorporation certificate. You apply on the GST portal (gst.gov.in), yourself or through a tax practitioner, and registration is free.

How should GST show on your website and invoices?

Once registered, the store itself has to handle GST correctly:

• Prices: show prices to consumers including GST, as Indian shoppers expect.
• HSN codes: each product needs its HSN code, the tax classification that decides its GST rate. Look up your products' codes on the GST portal's HSN search, and use the rate that goes with each.
• The tax split: CGST and SGST when the customer is in your state, IGST when they are in another state. The store works this out from the delivery address.
• Invoices: each order gets a tax invoice with your name, address and GSTIN; a serial number of up to 16 characters that is unique within the financial year; the date; the HSN code and description; the taxable value, tax rate and tax amount; and, for sales to other states, the place of supply. For sales to consumers of ₹50,000 or more, the buyer's name and address are also required (Rule 46 of the CGST Rules).
• On WooCommerce, GST invoice plugins handle HSN codes, the tax split and invoice numbering. On Shopify, the tax settings charge GST at checkout, and most Indian stores add a GST invoice app for proper tax invoices. We compare the two platforms in Shopify vs WooCommerce in India.

Check a sample invoice against this list before the first real order.

Payment gateway charges in India compared

All four gateways below charge no setup fee and no yearly fee on their standard plans. You pay per successful transaction, plus 18% GST on the gateway's fee.

Rates checked on 1 October 2026 on each gateway's own pricing page. Gateways run offers (for example, reduced fees for new merchants) and negotiate lower rates for high volumes, so check the current page before you sign up.

What 2% really costs. On a ₹1,000 order, a 2% fee is ₹20, plus ₹3.60 GST on that fee: ₹23.60 in total, or 2.36%. On ₹5 lakh of online sales a year, budget roughly ₹11,800 for gateway fees.

On Shopify, add Shopify's own fee. Shopify Payments isn't available in India, so Shopify adds 2% on the Basic plan (1% on Grow, 0.6% on Advanced) on top of the gateway's fee. WooCommerce has no platform fee.

Which payment gateway is best for a small business?

For most small stores the rates are close enough that other things decide it:

• How fast and easy approval is for your business type (KYC and website review).
• Settlement speed: next-day settlement helps cash flow.
• The plugin for your platform: all four have WooCommerce plugins and work with Shopify.
• International cards, if you sell abroad (see below).
• Support when a payment fails or a refund is stuck.

We use Razorpay for Wosag's own invoices: clients get a pay link by email and pay by UPI or card, and the invoice marks itself paid when the payment arrives.

What does a gateway check before approving you?

Gateways review both the business and the website before activating live payments. Expect to provide PAN, bank details, business proof and often a GSTIN, and expect them to check that your website shows:

• your business name, address and contact details;
• prices in rupees;
• a refund and cancellation policy, a shipping and delivery policy, privacy policy and terms, linked in the footer.

Our own refund policy and shipping policy pages exist for exactly this reason. Missing policy pages are a common reason a new store's gateway approval is delayed.

UPI, cards, wallets and cash on delivery

• UPI is how most Indian customers pay on a phone (Google Pay, PhonePe, Paytm). Put it first in the checkout on mobile.
• Cards and net banking matter more for higher order values and for business buyers.
• EMI options help with expensive items; gateways charge more for them.
• Cash on delivery (COD) still matters for first-time buyers, but it brings refused deliveries and returns. Confirm COD orders by WhatsApp or a quick call before dispatch, consider a small COD fee or a prepaid discount, and switch off COD for pincodes with high return rates.

Can you accept payments from the Gulf and abroad?

Yes. Razorpay, Cashfree and PayU all accept international cards once the feature is enabled on your account, usually after extra checks. International card payments cost more (about 3%), and customers abroad may be charged a currency conversion fee by their bank.

GST on exports: exports are "zero-rated", meaning no GST is payable on them. To export without paying IGST and claiming it back, a registered business files a Letter of Undertaking (LUT, Form GST RFD-11) on the GST portal once a year, and each export invoice carries the line "Supply meant for export under bond or Letter of Undertaking without payment of integrated tax" (Rule 96A of the CGST Rules).

For Kerala businesses with NRI customers, it also helps to show prices clearly in rupees, state delivery times to the Gulf honestly, and offer WhatsApp support in the customer's time zone.

Shipping within Kerala, across India and to the Gulf

Most small stores use a shipping aggregator rather than contracting couriers one by one.

Charges to check before you set shipping prices: the weight slab (charges usually step up every 500 g), volumetric weight for light but bulky boxes, the COD fee, return-to-origin charges for refused COD parcels, and how quickly COD money is remitted to you.

To the Gulf, aggregators offer international shipping with customs paperwork. Check which items are restricted in the destination country, and give customers honest delivery times.

Connecting it all to your store

• Payment gateway: a plugin or app plus your live API keys from the gateway. Test with a real ₹1 payment and a refund before launch.
• GST invoices: an invoice plugin or app, set up with your GSTIN, HSN codes and invoice series.
• Shipping: the aggregator's plugin, so orders flow in and labels print without retyping.

This is a day or two of setup for a developer, most of it testing. In our own examples, Best Marine Automation and MS Bollywood Film Equipments both run on WooCommerce behind a custom storefront, so payments, stock and orders stay in one admin.

Launch checklist

Tax

1. GST position confirmed with your CA (registered, or below the threshold and selling only within your state)
2. GSTIN, HSN codes and invoice series set up in the store
3. A sample invoice checked by your CA

Payments

4. Gateway account approved and live keys added
5. UPI shown first on mobile checkout
6. A real ₹1 payment completed and refunded
7. International cards enabled, if you sell abroad
8. COD rules set: confirmation, fee or prepaid discount, blocked pincodes

Shipping

9. Aggregator connected and pickup address verified
10. Shipping charges set by weight slab, including COD and returns
11. A test label printed and a test parcel tracked

Website

12. Refund, shipping, privacy and terms pages written and linked in the footer
13. Business name, address, phone and email visible
14. Prices shown in rupees, including GST
15. Order confirmation email and WhatsApp message tested
16. Analytics set up to track orders by source

Frequently asked questions

Is GST registration mandatory for selling online? Not always. Below ₹40 lakh a year for goods (₹20 lakh for services), a store that sells only within its own state through its own website does not have to register. Selling goods to other states, or selling on a marketplace (apart from the small intra-state seller exception), requires registration regardless of turnover.

What are Razorpay's charges? Razorpay's standard rate is 2% per transaction on cards, net banking and wallets, with no setup or yearly fee, plus 18% GST on the fee. UPI has no MDR but carries a 2% platform fee, and international cards cost up to 3% (checked 1 October 2026).

Which payment gateway has the lowest charges in India? On standard published rates, Cashfree (1.95%) and PhonePe (1.99%) are slightly below Razorpay and PayU (2%), as of 1 October 2026. The difference is small; approval speed, settlement time and support usually matter more.

How long does payment gateway approval take? Usually a few working days once your documents and website are complete. Missing policy pages or a website without prices are common causes of delay.

Can I sell online without GST? Yes, if you stay below the threshold and sell goods only within your own state. As soon as you ship goods to another state, you must register, whatever your turnover.

Sources

• CGST Act, 2017, Section 24 (compulsory registration).
• CGST Notification 10/2019-Central Tax (registration thresholds for suppliers of goods).
• CGST Notification 34/2023-Central Tax (small intra-state sellers on e-commerce operators).
• CGST Rules, 2017: Rule 46 (tax invoice) and Rule 96A (export under Letter of Undertaking).
• Pricing pages of Razorpay, Cashfree, PayU and PhonePe Payment Gateway, checked 1 October 2026.

Setting up a store? Wosag Tech builds ecommerce websites in Kerala on WooCommerce and Shopify, with the gateway, GST invoices and shipping connected and tested before launch. Talk to us about your store.