Mumbai, India’s financial capital, is one of the fastest-growing hubs for e-commerce entrepreneurs. With its vibrant marketplace, extensive logistics network, and tech-savvy population, the city offers immense potential for online businesses—from retail stores and marketplaces to service-based platforms.
However, establishing and operating an e-commerce business in Mumbai requires a strategic approach, proper legal structuring, and a clear understanding of taxation. This article walks you through the setup process, legal compliances, and taxation norms to help you launch successfully.
Selecting the correct legal entity is the first step. Your choice affects taxation, compliance, funding, and liability.
Sole Proprietorship – Easiest to start, minimal compliance, suitable for small-scale sellers.
Partnership Firm – Ideal for two or more individuals pooling resources, governed by the Partnership Act, 1932.
Limited Liability Partnership (LLP) – Combines flexibility of a partnership with limited liability protection.
Private Limited Company – Preferred by startups and investors due to scalability, funding potential, and credibility.
One Person Company (OPC) – Best for solo entrepreneurs seeking limited liability without partners.
💡 Pro Tip: For long-term growth and investor readiness, a Private Limited Company is often the most strategic choice.
An e-commerce business in Mumbai must comply with various legal requirements before going live:
GST Registration – Mandatory for all e-commerce sellers (even below ₹40 lakh turnover) if selling via platforms like Amazon, Flipkart, Meesho, etc.
Shop and Establishment License – Required under the Maharashtra Shops and Establishments Act.
Import-Export Code (IEC) – Needed if you plan to sell or source internationally.
Trademark Registration – Protects your brand name, logo, and identity.
FSSAI License – For businesses selling food products online.
Taxation for e-commerce is regulated both at the Central and State levels. In Mumbai, being part of Maharashtra, GST is the primary tax applicable.
GST Registration is compulsory for all e-commerce sellers and operators.
The applicable GST rate depends on the product/service category (5%, 12%, 18%, or 28%).
Monthly/quarterly GST returns must be filed (GSTR-1, GSTR-3B).
E-commerce operators like Amazon/Flipkart are required to collect 1% TCS on net taxable sales and deposit it to the government.
Sellers can claim credit for TCS collected in their GST returns.
Applicable as per the business structure:
Sole Proprietorship / Partnership – Taxed at slab rates.
LLP – Flat 30% on profits plus cess.
Private Limited Company – 22% (domestic company) plus surcharge and cess.
Accounting & Bookkeeping – Maintain digital records of all transactions.
Return Filing – GST returns, income tax returns, TDS returns (if applicable).
Data Protection – Compliance with IT Act and data privacy laws.
Platform Agreements – Ensure your terms with marketplaces are clear regarding returns, disputes, and payments.
Mumbai’s logistics infrastructure makes nationwide shipping efficient. You can partner with courier aggregators like Shiprocket, Delhivery, or Blue Dart.
Popular options: Razorpay, PayU, CCAvenue, Paytm.
Ensure the gateway is PCI-DSS compliant for secure transactions.
Starting an e-commerce business in Mumbai can be highly rewarding, but success depends on getting the legal, compliance, and taxation aspects right from day one. From selecting the right structure to managing GST and TCS obligations, each step impacts profitability and sustainability.
By partnering with experts like TAXAJ Corporate Services LLP, you can ensure your business is compliance-ready, tax-efficient, and legally protected, allowing you to focus on growth and customer experience.
📞 Contact TAXAJ today to get a customized plan for your e-commerce journey in Mumbai.
Created & Posted By Mayank Saini
Account Executive at TAXAJ