Rule 14B is a new registration route recommended by the 57th GST Council on 8 October 2026. It lets a small seller of goods on an e-commerce platform register in a state where it has no premises of its own by declaring the platform's warehouse in that state as its principal place of business (PPOB). Registration under it will be granted automatically by the GST portal, subject to conditions. It is a recommendation today, not a rule you can file under yet.
That last sentence matters. The press release itself says the recommendations take effect only through notifications and law amendments, and as on 9 October 2026 the CGST Rules have not been amended to insert Rule 14B.
So the useful questions are who will qualify, how it differs from the virtual office route sellers use today, and what to do in the weeks before the notification arrives.
Key facts at a glance
Question | Position as on 9 October 2026 |
|---|---|
What was decided? | The GST Council recommended inserting Rule 14B in the CGST Rules, 2017 (PIB release, 8 October 2026). |
Who is it for? | Small suppliers of goods through e-commerce operators (ECOs), in states where they have no physical presence. |
The ceiling | ITC passed on of not more than ₹2.5 lakh per month, excluding stock transfers between distinct persons. |
What gets declared as PPOB? | The warehouse of the e-commerce operator in that state. |
How is registration granted? | Automatically by the system, subject to conditions not yet published. |
Can I apply today? | No. The rule needs a CGST Rules amendment notified by CBIC. |
What the 57th GST Council actually recommended
According to the PIB release of 8 October 2026, para 4.1, the Council recommended a simple registration mechanism "for small suppliers making supplies of goods through ECOs, in States/UTs, where they do not have physical presence". The supplier must intend to pass on ITC of not more than ₹2.5 lakh per month, excluding stock transfers between distinct persons, and declares the ECO's warehouse in that state as its PPOB.
This continues an in-principle approval given at the 56th meeting on 3 September 2025. The 57th meeting supplied the mechanism: a new Rule 14B, automatic grant, and the warehouse-as-PPOB design.
Reports of the Finance Minister's press briefing add two details that the release does not spell out. The operator's consent is needed to declare its warehouse, and the registration in the other state will be limited to supplies made through the platform. Treat both as expected conditions until the notification text confirms them.
Who will qualify for Rule 14B
Four conditions come straight from the release. You must supply goods, not services. You must supply through an e-commerce operator, as Section 2(45) of the CGST Act defines it. You must have no physical presence in the state where you want the registration. Your ITC passed on must stay within ₹2.5 lakh a month.
Seller profile | Likely position under Rule 14B as recommended |
|---|---|
B2C seller on marketplaces, stock in a fulfilment centre in another state | The intended user of the rule |
Seller with a godown or office of its own in that state | Outside the rule, because it has physical presence there |
Seller of services on an aggregator app | Outside the rule, which covers supplies of goods |
Seller with large B2B orders through a marketplace | Outside the rule once ITC passed on crosses ₹2.5 lakh a month |
Seller also shipping from its own website into that state | Unclear until the conditions are notified; briefing reports suggest platform sales only |
How the ₹2.5 lakh ITC limit works
The limit counts tax you pass on to registered buyers, not your sales. A sale to a consumer passes on no ITC, so a pure B2C seller sits at zero against the limit however large its sales are.
The ₹2.5 lakh figure mirrors Rule 14A GST registration, inserted by Notification No. 18/2025-Central Tax dated 31 October 2025, which offers registration within three working days to applicants whose output tax on supplies to registered persons does not exceed ₹2.5 lakh a month.
The exclusion for stock transfers is the important carve-out. When you send stock from your home-state GSTIN to your new GSTIN in the warehouse state, Schedule I of the CGST Act treats that as a supply between distinct persons and you raise a tax invoice. The ITC on that invoice flows to your own new registration, and the Council has said it will not count towards the ₹2.5 lakh.
A worked example. A Rohtak seller of steel kitchenware sends ₹6 lakh of stock to a marketplace warehouse in Karnataka at 18% GST, so ₹1.08 lakh of IGST moves to its Karnataka GSTIN. That ₹1.08 lakh is excluded. If the same seller also sells ₹10 lakh a month to restaurants registered under GST in Karnataka, the ₹1.8 lakh of tax on those B2B sales does count, and it is still inside the limit.
Rule 14B compared with the route sellers use today
Today a seller with no premises in a state takes a separate GSTIN there with a PPOB it can prove, usually a documented virtual office, and then adds the marketplace fulfilment centre as an additional place of business (APOB). Our Amazon APOB playbook shows how that works for FBA. Our guide to GST registration in another state without an office sets out that sequence.
Point | Current route (virtual office PPOB plus FC as APOB) | Rule 14B as recommended |
|---|---|---|
PPOB in the new state | Your own documented premises | The ECO's warehouse |
Approval | Officer processing, 7 working days, or 30 days with physical verification | Automatic grant by the system |
ITC limit | None | ₹2.5 lakh a month passed on, stock transfers excluded |
Sales covered | All supplies from that state | Expected to be platform supplies only |
Available now | Yes | After notification |
We expect most first-time marketplace expansions by B2C sellers to move to Rule 14B once it is notified. The current route keeps its place for anyone with B2B volume, a website channel, or a need to register before the notification. We compare the two in detail in a separate guide.
What has not been decided yet
Several details that change how you plan are still open, and nobody can answer them until CBIC notifies the rule.
The exact conditions attached to automatic grant, including what happens if you later exceed ₹2.5 lakh.
Whether one registration can cover warehouses of more than one marketplace in the same state.
Whether existing GSTINs taken through a virtual office can move to Rule 14B or must stay where they are.
How the operator's consent is recorded on the portal, and what happens to your PPOB if the operator closes or moves the warehouse.
The notification number and the date from which applications open.
Do not file anything that assumes an answer to these. We will update this guide with the notification number and date once it is published.
What to do before Rule 14B is notified
If your expansion can wait a few weeks, wait. Registering through a virtual office now and moving later may cost more than the time saved, especially if no migration path is provided.
If you need to sell in the new state this month, use the current route. A properly documented PPOB and an APOB amendment for the fulfilment centre remain fully valid, and nothing in the 57th Council release withdraws them.
Either way, work out your monthly ITC passed on from your last three GSTR-1 filings now. That one number decides whether Rule 14B will be open to you.
Need to sell in a new state before Rule 14B arrives? Talk to Keshav's team about a verification-ready virtual place of business for the state you are entering.
Your next step: pull your last three GSTR-1 summaries, total the tax on B2B invoices for each month, and check it against ₹2.5 lakh before deciding which route to plan for.
