Can you sell on Shopify in India without GST? Gateways, KYC and the inter-state rule
Yes, if you only ship goods within your own state and stay under ₹40 lakh. Ship to another state and GST is compulsory. Gateways onboard you with PAN.
The short answer
- Selling physical goods to a customer in another state requires GST registration under Section 24 of the CGST Act, whatever your turnover, even at ₹1 of sales.
- If you ship goods only within your own state, the normal threshold applies: ₹40 lakh a year in most states, ₹20 lakh in the special category states listed by the GST Council.
- TCS does not apply when you sell your own products through your own website, so a Shopify store is not treated like an Amazon or Flipkart listing for registration.
- Razorpay and Cashfree both onboard sellers without a GSTIN: an individual needs PAN, Aadhaar or CKYC and a bank account; a proprietorship needs 2 business proofs, and Udyam counts as one.
- Shopify Payments is not available in India, so a store without GST still pays a third-party gateway fee plus Shopify's 2% third-party fee on Basic for every prepaid order.
Want this done rather than explained? see my published Shopify developer rates
You can sell on Shopify in India without GST only if you ship physical goods inside your own state and your turnover stays under ₹40 lakh a year (₹20 lakh in a few special category states). The first time you ship goods to a customer in another state, GST registration becomes compulsory, whatever your turnover. Payment gateways like Razorpay and Cashfree will still onboard you without a GSTIN using your PAN, Aadhaar or CKYC and a bank account.
Most of the answers floating around on this question are half right. They tell you about the ₹40 lakh threshold and skip the inter-state rule, which is the part that actually decides things for a Shopify store selling across India. This post goes through both, then the gateway KYC side, which is where people get stuck in practice.
For the full cost picture once you're live (plans, gateway fees, apps), see the Shopify pricing hub for India.
Is GST registration compulsory for a Shopify store in India?
It depends on where your customers are. GST law gives small businesses a turnover threshold, and then lists categories that must register even below it. Two parts matter for you.
The threshold. According to the GST Council's registration guide, a business supplying only goods with all-India turnover below ₹40 lakh doesn't need to register. That drops to ₹20 lakh in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura and Uttarakhand. For services the threshold is ₹20 lakh (₹10 lakh in Manipur, Mizoram, Nagaland and Tripura).
The exception. Section 24 of the CGST Act lists inter-state suppliers among those who must register irrespective of turnover. Services got relief through Notification 10/2017-Integrated Tax, so a service provider under ₹20 lakh can sell across states unregistered. Goods did not get that relief, except for handicraft goods under a separate notification.
So here is how it plays out for a Shopify seller:
| Your situation | GST needed? |
|---|---|
| Physical goods, customers only in your own state, under ₹40 lakh/yr | No (threshold applies) |
| Physical goods, any customer in another state | Yes, from the first inter-state sale |
| Physical goods, over ₹40 lakh/yr (₹20 lakh in special states) | Yes |
| Digital services or courses, under ₹20 lakh/yr, any state | No (services exemption) |
| Handicraft goods under the threshold | No, even inter-state (separate notification) |
I'm a developer, not a tax adviser. Treat this table as the map and get your CA to confirm the turn for your product and state.
Doesn't the e-commerce rule make GST mandatory from day one?
This is the confusion behind half the questions I get. Section 24 also makes registration compulsory for people supplying goods "through an e-commerce operator" who collects tax at source (TCS). That rule is about marketplaces: Amazon, Flipkart, Meesho and similar platforms that collect money on your behalf and deduct TCS.
Your own Shopify store is different. The GST Council's registration flyer says it directly: "TCS shall not apply, where a person supplies his own product through his own website." Shopify gives you the software. The customer buys from you, on your domain, and pays into your gateway account. You fall under the normal rules above, the threshold plus the inter-state requirement.
There's also a relief for marketplace sellers you may have read about. Notification 34/2023-Central Tax, in force since 1 October 2023, lets small sellers supply goods through an e-commerce operator without registration. It has conditions: no inter-state supplies, sales in one state only, a valid PAN, an enrolment number from the GST portal, and turnover under the threshold. It's useful if you sell on Amazon within your own state. It doesn't help a Shopify store ship to another state.
In September 2025 there were reports that the GST Council was looking at a simpler single-state scheme for small e-commerce sellers. As of October 2026 I couldn't find any notification in force that lets an unregistered seller ship goods inter-state. If that changes, I'll update this post.
Which payment gateways work on Shopify without GST?
First, the Shopify side. Shopify Payments is not available in India, so every Indian store connects a third-party gateway. Razorpay, Cashfree, PayU, PhonePe PG and CCAvenue are the usual names. None of them requires a GSTIN to open an account. What they require depends on the business type you pick at signup.
| Gateway | Business type without GST | What they ask for | Standard pricing (Oct 2026) |
|---|---|---|---|
| Razorpay | Individual / Unregistered | Personal PAN, bank account + IFSC, identity and address via CKYC (or DigiLocker, Aadhaar, photo ID upload; video KYC if CKYC fails) | 2% platform fee on domestic methods, 18% GST on the fee, ₹0 setup |
| Razorpay | Proprietorship | Owner PAN, address proof, bank account, plus 2 business proofs from: Udyam, GST, Shop and Establishment, IEC, postpaid mobile bill | Same |
| Cashfree | Unregistered individual / proprietorship | PAN (or Form 60), bank account in the owner's name, Aadhaar or CKYC, at least 2 business proofs such as Udyam or Shop and Establishment | 1.95% to 2% platform fee, zero setup |
| PhonePe PG | Non-GST seller | Personal PAN, Aadhaar, savings or current account | Check PhonePe's current rate card |
A few practical notes from setting these up:
- Pick "Individual" only if you have no business documents at all. If you have Udyam, choose Proprietorship. You get a business name on the account, and it usually reads better on customers' bank statements.
- Cashfree's docs say that if a proprietorship can't show the business proofs, they switch the account to Unregistered. That isn't a rejection, just a different category.
- PhonePe's own guide notes that unregistered accounts "often have lower monthly transaction limits (e.g., ₹50,000) until further business proof is provided." Ask your gateway about limits before you run ads, so a good day doesn't get your settlements held.
Can you do it with only Udyam registration?
Mostly yes. Udyam is free, and a business that isn't required to hold GST can register on Udyam without a GSTIN. Razorpay and Cashfree both accept the Udyam certificate as business proof for a proprietorship. Both ask for two proofs, so plan on Udyam plus a Shop and Establishment certificate or a similar document.
Udyam is an MSME identity. It doesn't change whether you owe GST. If you ship goods to another state, Udyam doesn't cover you.
What about Cash on Delivery?
COD needs no gateway. Shopify's Cash on Delivery is a built-in manual payment method under Settings, then Payments, and Shopify's help docs say you aren't charged third-party transaction fees on manual payments. Your courier collects the cash and remits it to you, minus its COD charge. I cover what that really costs in Shopify COD charges and prepaid share in India.
What do you lose by running without GST?
Staying unregistered is legal in the intra-state case. It still costs you in ways people don't expect.
- No input tax credit. Razorpay charges 18% GST on its fee. Your Shopify bill, Meta ads and agency invoices may carry GST too. Unregistered, you can't claim any of it back. On ₹5 lakh a month of prepaid sales at a 2% gateway fee, the GST on the fee alone is ₹1,800 a month that a registered seller could offset.
- You can't ship to other states. For a D2C brand that runs Instagram or Meta ads, this is the big one. Ads don't respect state borders, and an order from Bengaluru when you're in Delhi already needs a GSTIN.
- Marketplaces are mostly closed. Notification 34/2023 opened intra-state selling on marketplaces through enrolment. Anything wider needs registration.
- B2B buyers walk away. Retailers and corporate gifting clients want a GST invoice so they can claim credit.
- Gateway limits may be lower, as PhonePe's guide notes, until you add business proof.
What you gain is less paperwork and no GST added to your prices. For a hobby store or a test run in your own city, that can be the right call.
How do you set up payments on a Shopify store without GST?
The order I follow:
- Get Udyam (free, on the government portal) if you're a proprietor.
- Sign up with Razorpay or Cashfree as a proprietorship. Keep your PAN, Aadhaar-linked mobile and bank details ready. Wait for the activation confirmation before you connect Shopify.
- In Shopify, install the gateway's payment app (for Razorpay it's "Razorpay Secure"), log in with the owner account, and activate it under Settings, then Payments.
- Run a test order in test mode. Razorpay's docs point out that Shopify's test mode is a separate toggle from the gateway dashboard, so switch both.
- Turn on Cash on Delivery as a manual payment method.
- In Shopify's shipping settings, limit delivery to your own state if you aren't registered. That one setting keeps you on the right side of the inter-state rule, and it's easy to forget.
Once you register, Shopify's tax settings handle the split itself: CGST plus SGST for orders inside your state, IGST for orders outside. Shopify suggests storing HSN codes in the HS tariff code field on each product.
What does a prepaid order cost without GST?
You pay the same fees as a registered seller. The difference is that the GST on those fees becomes a cost you can't recover.
| ₹1,500 prepaid order, Basic plan, Razorpay standard | Amount |
|---|---|
| Razorpay platform fee (2%) | ₹30.00 |
| GST on that fee (18%) | ₹5.40 |
| Shopify third-party fee on Basic (2%) | ₹30.00 |
| Total payment cost | ₹65.40 (4.36%) |
Shopify's subscription prices are shown excluding taxes. Check your Shopify invoice for any GST charged on top. If you're registered, that's creditable too. For plan-by-plan fees, see Shopify transaction fees in India and the payment gateway comparison.
When should you register for GST?
My rule for clients is simple: register before your first order leaves your state. For almost every brand I've built for, that was before launch, because the whole point of a Shopify store was selling to all of India.
Stay unregistered only if all of these are true:
- You sell physical goods and will genuinely ship only within your state.
- You're well under ₹40 lakh a year (or ₹20 lakh in a special category state).
- You don't plan to sell on marketplaces beyond the intra-state enrolment route.
- Your costs carry little GST, so losing input credit doesn't hurt.
If you sell digital products, courses or services, the ₹20 lakh services threshold applies across states, so you have more room.
What I'd do
If you're testing a product idea in your own city, start unregistered. Get Udyam, open Razorpay or Cashfree as a proprietor, switch on COD, and restrict shipping to your state. It costs nothing and you can be taking orders within a week.
If you're building a brand meant to sell across India, register for GST first and do it properly. The paperwork is a few days. Getting caught shipping inter-state without a GSTIN, or rebuilding your invoices later, takes far longer. I'd rather a client spends that week before launch than in the middle of a sale.
If you want the store, gateway and checkout set up in the right order, with COD rules, shipping zones and tax settings matched to your registration status, tell me about your store. I'll tell you what you need before launch and what can wait. You can also check the pricing hub for what the platform itself costs.
Related reads
- Shopify payments, COD and GST in India: the setup guide
- Shopify payment gateways in India: Razorpay vs PayU
- Start a D2C brand on Shopify in India (2026)
Sources
- GST Council: Registration under GST Law (flyer)
- CBIC GST FAQs
- NACIN: e-Book on e-Commerce Operators and GST (Sept 2024), covering Notification 34/2023-Central Tax
- Razorpay: KYC documents by business type
- Razorpay: pricing
- Razorpay: Shopify Razorpay Secure integration steps
- Cashfree: account activation and business documents
- Cashfree: payment gateway charges
- PhonePe Business: payment gateway without GST
- Shopify Help Center: GST in India FAQ
- Shopify Help Center: manual payment methods
- Shopify Help Center: Shopify Payments supported countries
- Shopify India pricing
FAQ
Frequently asked questions
Can I sell on Shopify in India without a GST number?
Yes, in one situation. If you sell physical goods only to customers inside your own state and your yearly turnover stays under ₹40 lakh (₹20 lakh in special category states), you don't need GST. The moment you ship goods to another state, Section 24 of the CGST Act makes registration compulsory regardless of turnover. Most Shopify stores ship across India, so most need GST from their first inter-state order.What is the best payment method for Shopify without GST?
Razorpay and Cashfree are the practical choices because both accept an unregistered individual or a proprietorship without a GSTIN. You sign up with your PAN, complete Aadhaar or CKYC verification and add a bank account. Cash on Delivery needs no gateway at all, since Shopify's built-in COD is a manual payment method. Expect a gateway fee of around 2% plus 18% GST on that fee, plus Shopify's third-party fee on prepaid orders.Can I add a payment gateway on Shopify with just Udyam registration?
Usually yes. Razorpay and Cashfree both list the Udyam (MSME) certificate as an accepted business proof for a sole proprietorship, alongside GST, Shop and Establishment licence and others. Both ask for two business proofs, so Udyam plus one more document is the common route. Udyam does not replace GST for tax purposes; it only helps with gateway KYC.What KYC documents does Razorpay need for a Shopify store without GST?
For the Individual or Unregistered business type, Razorpay asks for your personal PAN and a bank account with IFSC. Identity and address are pulled from CKYC; if that fails you verify through DigiLocker or upload Aadhaar, a photo ID or passport, and may need video KYC. For a proprietorship, you also upload two business proofs such as Udyam, Shop and Establishment certificate or IEC.Do I need GST to sell on Shopify if I ship all over India?
Yes. Shipping physical goods to buyers in other states is an inter-state supply, and the CGST Act requires registration for inter-state supply of goods no matter how small your turnover is. The ₹40 lakh threshold only protects sellers who stay within one state. Notification 34/2023, which lets small sellers skip registration, covers intra-state sales through marketplaces like Amazon, not inter-state sales from your own store.Is GST registration different for selling on my own website versus Amazon?
Yes. Marketplaces that collect TCS bring their sellers under the e-commerce registration rules, with a limited exemption for small intra-state sellers. The GST Council states that TCS does not apply when you sell your own products through your own website, so a Shopify store falls under the normal rules: the turnover threshold for intra-state sales and compulsory registration for inter-state goods.When should I register for GST as a small Shopify seller?
Register before your first order ships outside your state, because that order already needs a GSTIN. If you sell digital services rather than goods, the ₹20 lakh services threshold applies even across states. Many founders also register early to claim input tax credit on Shopify, gateway and ad invoices and to sell on marketplaces. Speak to a CA about your exact product and state before deciding.
Revision history· 1 entry
October 07, 2026
Initial post. The GST registration rule for Shopify stores in India (inter-state goods versus the intra-state threshold), which gateways onboard without a GSTIN and their KYC lists, what you lose without GST, and when to register. Facts checked against the GST Council, CBIC notifications, Razorpay, Cashfree, PhonePe and Shopify Help Center pages on 2026-10-05.
Last updated October 07, 2026
