The finance ministry is in discussions with state governments to ease the requirement for update of goods and services tax (GST) registrations to include each dark store and warehouse operated by ecommerce (ecom) and quick-commerce (qcom) companies, amid rapid expansion of such facilities across smaller cities.
Industry players have told the government that mushrooming qcom operations across cities has led to the setting up of thousands of dark stores and warehouses, making the process of updating GST registrations for every location time-consuming and cumbersome, according to officials familiar with the matter.
Under the GST law, any location where goods are stored or from where they are supplied, including warehouses and dark stores, qualifies as a “place of business”. These must be declared under appropriate state-wise GST identification number (GSTIN). A business needs only one GSTIN per state/Union territory (UT). Multiple dark stores or warehouses within the same state are added as “additional places of business” to the existing GSTIN via a simple amendment. However, the frequent addition or deletion of locations requires repeated amendments on the portal, which is cumbersome, especially for platform sellers who must update details individually.
“This is a Centre-state jointly administered subject, so both will need to come together to address these concerns effectively,” said one of the officials. “While we are committed to improving ease of doing business, several states have expressed fears that overly simplified registration norms for multiple dark stores could lead to challenges in tracking supplies, potential revenue leakage, and difficulties in enforcement,” he added.
A query sent to the finance ministry did not elicit any response till the time of going to press.
An tax expert said sellers operating through ecom platforms currently face multiple challenges in updating state-wise GST registrations whenever warehouses are added or deleted.
“As ecom players aggressively expand their network, such updation becomes critical for business operations. Any delay in registration directly impacts sales from a particular state and consequently affects state GST revenue as well,” he said.
He said the government should look at simplifying the registration amendment process and consider allowing ecom platforms to do warehouse additions and deletions on behalf of sellers, subject to adequate safeguards.
“The government should focus on simplifying and digitising the updation process, possibly allowing ecom platforms to make such changes for sellers. However, this should be done with suitable safeguards to prevent revenue leakage and maintain audit trails,” he added.
He also suggested easing the requirement of maintaining a principal place of business in every state for sellers operating through ecom platforms. “Small sellers looking to expand across India through ecom platforms face operational difficulties. They should be allowed to use their home state location as the principal place of business, while warehouses can continue as additional places of business,” he said.
Another tax expert suggested that the government should explore a centralised warehouse or dark store registration model within a state, allowing multiple fulfilment centres operating under a common PAN (permanent account number) to function under a single GST registration.
He said such a framework should be backed by digital inventory tracking and audit safeguards, including geotagging of warehouses, disclosure of warehouse details in registration certificates, and timely reporting of suppliers storing goods at such facilities.
He added that many dark stores merely function as logistical extensions enabling ultrafast deliveries rather than independent commercial establishments dealing directly with customers. Given that ecom and qcom companies already maintain real-time digital inventory systems and invoice trails, the GST framework could rely more on electronic reporting and less on multiple physical registrations, he said.
Another tax expert said the issue has become more significant in the post-GST era as ecom and qcom businesses rely on extensive networks of warehouses and dark stores for faster deliveries.
“While GST removed several pre-GST interstate tax barriers, state-wise registrations continue because of the destination-based tax structure. The key challenge is the frequent updation required whenever warehouses are added or removed, which can delay expansion and affect sales,” he said.
