GST on e-commerce software subscriptions: what store owners should know

Platform prices on most pricing pages exclude GST. Here is what that means in practice. This is general information, not tax advice, and rules and thresholds change, so confirm your position with a chartered accountant.

Why prices exclude GST

Pricing pages show the list price. At checkout, GST is added where it applies. Software and online information services are generally charged at 18% GST in India, which is why a ₹3,660 plan becomes ₹4,318.80 with tax.

What attracts GST

• The subscription.
• Many platform fees, such as transaction or service fees.
• Apps and add-ons that you buy as services.
• Payment gateway fees, which are also generally taxed.

Always check the invoice, which should show the tax separately.

Input tax credit (ITC)

If your business is registered under GST, the GST you pay on business purchases can usually be set off against the GST you collect from customers, subject to conditions. For that, the invoice should carry your business name and GSTIN, so enter your details in your billing settings before the first payment. Ask your accountant which purchases qualify and how to reconcile them.

If you are not registered

If you are below the registration threshold and not required to register, you generally cannot claim credit, so GST on your tools is a real cost. Include it when you calculate cost per order. Thresholds and rules differ by state and by whether you sell goods or services and whether you sell across state lines, so do not rely on a rule of thumb.

Foreign and Indian vendors

Some platforms are run by overseas companies. The way GST applies to foreign vendors differs from how it applies to Indian ones, and the invoice may look different. Ask your accountant how to treat it.

Your customers' GST

Separately, you must issue tax invoices to your own customers if you are registered. Your platform should be able to generate GST-compliant invoices with the right tax breakdown. Check this during your trial.

A simple month-end routine

1. Download the invoice from each software vendor (platform, gateway, apps, domain, email).
2. Check that each shows your business name, your GSTIN and the tax split.
3. File them in one folder by month, with the vendor's name in the file.
4. Match them against your bank or card statement so that nothing is missing.
5. Send the folder to your accountant before the return is due.

Common mistakes

• Using a personal email or name when signing up, so invoices come without your business details.
• Forgetting tools that bill in dollars, where the invoice and tax treatment can differ.
• Not tracking small subscriptions. Several ₹500 apps can add up to more than your platform fee.
• Mixing personal and business cards, which makes reconciliation harder at year-end.

What to do next

Add your GSTIN and business name to every software account, then ask each vendor for GST invoices. At month-end, give your accountant a folder of all invoices.