Can Composition Scheme Dealers Sell on Amazon and Flipkart? The Rule, the Special Procedure and the Catch

Under the GST law, a composition taxpayer cannot supply goods through an e-commerce operator (ECO) such as Amazon or Flipkart. One exception was created by Notification 36/2023-Central Tax, dated 4 August 2023, effective 1 October 2023: a special procedure under which composition dealers can supply through an ECO within their own State only. Whether a given marketplace takes composition sellers is its own call. This page is general information, not tax advice.

What is the composition scheme in one paragraph?

The composition scheme is an optional, simpler way for small taxpayers to pay GST. Instead of charging GST on each invoice and claiming input tax credit, a composition dealer pays a small percentage of turnover and files a simplified return. The trade-off is that you cannot collect GST from customers and cannot pass on input tax credit. The scheme is set out in section 10 of the CGST Act. The turnover limits and rates are revised from time to time, so check the current figures with your GST practitioner rather than from an old blog.

A related change worth knowing: the October 2026 amendment to the CGST Rules changes the composition forms (CMP-02, CMP-04 and CMP-08) and adds a category for persons eligible under section 10(2A). We have not reviewed what each category covers, so read the notification with your accountant before relying on it.

Why does the law stop composition dealers selling through Amazon or Flipkart?

Section 10(2)(d) of the CGST Act says a composition taxpayer cannot make supplies through an e-commerce operator. The GST Council's FAQ on tax collected at source (TCS) draws the consequence: since a composition taxpayer cannot supply through an ECO, the question of collecting TCS on such supplies does not arise.

That FAQ predates the 2023 special procedure, so treat it as the baseline rule, not the last word. Marketplaces also need regular GST details to collect tax at source and file their own returns, which is the practical reason they ask for a GSTIN and tax class at onboarding.

What changed in 2023?

CBIC notified a special procedure for ECOs in respect of goods supplied by composition dealers: Notification No. 36/2023-Central Tax, dated 4 August 2023, effective 1 October 2023. The summary we could verify says:

The source we opened is a tax-news summary, not the gazette text. It does not state rates or limits, and we have not read the full notification. If you plan to rely on it, get the notification text from cbic-gst.gov.in and read the conditions line by line.

What does that mean for a seller selling across India?

Because the special procedure bars inter-State supplies, a composition dealer using it could only sell to buyers in the same State as the dealer. For a marketplace seller that is a hard limit. Amazon and Flipkart customers are spread across the country, and a listing normally ships to many States.

If your plan is to reach customers in several States, composition is a poor fit. Many small sellers move to regular registration, and sellers who must sell inter-State on a marketplace are generally registered as regular taxpayers. See the GST TCS guide for how tax collected at source then works for regular sellers.

Do Amazon.in and Flipkart accept composition sellers?

We could not confirm this from a public page. Both platforms publish their GST requirements inside the seller registration flow and seller help, and those pages change. A Flipkart seller landing page lists "Composition scheme sellers" as a topic, but the page text did not explain the rule. We did not find an equivalent public Amazon.in page.

Do not assume that the 2023 special procedure means a marketplace has switched on support for composition dealers. The procedure sets what an ECO may do under GST; the marketplace decides whether to offer it. Ask seller support in writing, and keep the reply.

What if you only sell offline and want to test online?

Some composition dealers want to try a marketplace for a few products. Before you do, work out the whole picture. A marketplace charges referral and closing fees, and as a regular taxpayer you would also charge GST on your sale price. A product priced at ₹1,000 including GST at 18% brings ₹847.46 before GST, so check that your margin survives once fees and tax are taken off. Our GST rate finder helps you pick the right rate for your product.

What should you check before you register?

1. Confirm your status. Check your GST registration certificate and your CMP-02 acceptance. If you are on composition, a regular marketplace account may be refused or later flagged.
2. Check where your buyers are. If most sales would go outside your State, the special procedure does not help you.
3. Ask the platform. Use the seller registration help or support chat. Ask: "Do you accept composition-scheme sellers for goods, and for inter-State orders?"
4. Compare the cost of switching. Moving from composition to regular means you charge GST and can claim input tax credit. Your accountant can model that for your margins.
5. Do not register with a false declaration. Declaring regular status while on composition risks cancellation, penalties and held payouts.

How do you leave composition to sell on a marketplace?

You file the withdrawal from the scheme on the GST portal, following the procedure in the CGST Rules, and then charge GST on invoices from the effective date. The exact steps and forms are in the Rules and on gst.gov.in. We have not walked through them here, so confirm the current process with your GST practitioner.

Once you are a regular taxpayer, small sellers with a registration in a State where they only have marketplace warehouses may also look at Rule 14B, introduced from 1 November 2026. Read our Rule 14B guide first, because it is for sellers supplying goods through ECOs that collect tax at source.

FAQ

Can a composition dealer sell on Amazon? The law bars composition taxpayers from supplying goods through an ECO under section 10(2)(d). A special procedure from 1 October 2023 allows intra-State supplies through an ECO under conditions. Whether Amazon.in accepts you is Amazon's decision, so ask seller support and keep the reply.

Can a composition dealer sell on Flipkart? The same GST rules apply. Flipkart's seller site lists composition scheme sellers as a topic but we could not read its rule. Confirm with Flipkart seller support before you invest in listings.

Can a composition dealer sell to another State? Under Notification 36/2023-Central Tax the ECO must not allow inter-State supplies by composition dealers. So no, not through the special procedure.

Does the marketplace collect TCS on a composition dealer's sales? Under the special procedure, yes: the ECO collects tax at source and reports it in GSTR-8. The older Council FAQ says TCS does not arise, because it assumes no composition supplies through ECOs.

Can I charge GST on my invoice while on composition? No. A composition dealer does not collect GST from customers, and issues a bill of supply, not a tax invoice. Check the current rule with your accountant.

What is the easiest route for a small seller who wants to sell across India online? Usually regular GST registration. It allows inter-State sales and input tax credit. Your accountant can tell you whether the extra compliance is worth it for your turnover.

Is this tax advice? No. It is general information only, based on the sources linked on this page. Confirm your own position with a chartered accountant or GST practitioner before you change your registration or list on a marketplace.

What next?

If you are unsure whether your GST status will pass marketplace onboarding, sort that before you pay for photos, stock or ads. Blooprint helps with Amazon account management and Flipkart account management, from registration details to catalogue and ads.