Warehouses, "Fulfilled by ECO" and the Additional Place of Business

Warehouses explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

The 'Fulfilled by ECO' model is a logistics decision that most sellers make for commercial reasons. It is also a registration event, and the consequences of missing it reach three separate places in the GST law at once.

Where a seller stores goods in a warehouse owned or managed by the platform, it is mandatory for the seller to declare that warehouse as an "Additional Place of Business" (APOB) in its registration certificate. Failure produces three distinct exposures: invalid movement of goods (an e-way bill must originate from a registered place of business), an incorrect place of supply (the location of the supplier is a determinant), and invalid invoices that jeopardise the recipient's ITC. A shared warehouse may be declared as an APOB by several suppliers at once — and section 52(12)(b) empowers a Deputy Commissioner or above to demand from the ECO the stock held by suppliers in warehouses it manages and declared as APOBs.

Why the arrangement creates the problem

The Handbook describes what actually happens in the marketplace model:

"There are scenarios where the goods owned by sellers are kept at the warehouse/godown located across the country. Such warehouses are owned by ECO, wherein when the goods are dispatched the invoice is issued in the name of seller mentioning their particular GSTIN which is practically issued by ECO himself from those warehouses/godowns."

Read that carefully. The goods belong to the seller. The invoice is in the seller's name and carries the seller's GSTIN. But the premises belong to the platform, and the document is generated from there.

So the supply is being made from a location that is, on the seller's registration certificate, nowhere. Every downstream document then rests on an address that the seller has not declared.

The three consequences of not declaring it

The Handbook lists them, and each is independently sufficient to cause trouble.

Invalid movement of goods. Movement from the seller's primary location to the ECO's warehouse, and from the warehouse to the final customer, must be covered by valid documentation such as an e-way bill, which originates from a registered place of business. Without APOB registration, "such movements can be questioned by tax authorities."

Incorrect place of supply. "The location of the supplier is a key determinant for the place of supply." Storing goods and making supplies from an undeclared location "can lead to incorrect determination of tax (IGST vs. CGST/SGST) and potential disputes."

This is the one with the longest tail. A wrong-head determination is not a small error. It produces tax paid under the wrong head, a refund claim under section 77, and interest exposure until it is corrected.

Invoice and ITC validity. "Invoices must bear the address of the place of business from where the supply is made. Issuing invoices from an unregistered warehouse location can render them invalid, jeopardizing the recipient's ability to claim Input Tax Credit (ITC)."

The third consequence hits someone else. It is the customer whose credit is at risk — which makes this a commercial and reputational problem for the seller, not only a compliance one.

Can several sellers declare the same warehouse?

Yes — and the Handbook answers the question expressly, because it is the natural objection to the APOB requirement in a shared-fulfilment model.

"Any registered person can declare a premise as an additional place of business if he has requisite documents for use of the premises as his place of business (like ownership document, agreement with the owner etc.) and there is no restriction about use of a premises by multiple persons."

Two conditions follow from that answer:

Documentation. The seller must hold documents evidencing its use of the premises as its place of business — typically the fulfilment agreement with the platform. A bare storage arrangement with nothing in writing will not support the declaration.

Records. The registered person "shall have to comply with the requirements of maintaining records as per section 35 of the CGST Act, 2017 and rules 56 to 58 of the CGST Rules, 2017." Rule 56 requires accounts of production, inward and outward supply, stock, and — under rule 56(7) — that the accounts be kept at each place of business to which they relate. Rule 58 governs records to be maintained by owners or operators of godowns and warehouses.

The law already assumes shared warehouses exist

The Handbook makes an argument from statutory structure that is worth borrowing, because it settles the point.

Section 52(12)(b) empowers any authority not below the rank of Deputy Commissioner to serve a notice on the operator requiring details of "stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operator and declared as additional places of business by such suppliers".

The provision only makes sense if such declarations are expected. As the Handbook puts it, "existence of shared facilities operated by the ECO is also envisaged in the law."

And the notice has teeth. Under section 52(13) the operator must furnish the information within fifteen working days of service. Under section 52(14), failure attracts a penalty which may extend to ₹25,000, without prejudice to any action under section 122.

A seller who has not declared the APOB is visible in that data. The ECO's response to a section 52(12)(b) notice discloses stock held by suppliers at its warehouses; a supplier whose registration shows no such place of business is an obvious mismatch.

What a seller should actually do

Declare every fulfilment warehouse in the State as an APOB through an amendment to the registration certificate, before stock is moved there.

Register in each State where stock is held. An APOB can only be added to a registration in that State. Stock in another State means a separate registration in that State, not an APOB on the home registration — because section 25(1) requires registration in every State from which taxable supply is made.

Keep the fulfilment agreement. It is the document that supports the APOB claim.

Keep records at, or referable to, the location. Sections 35 and rules 56 to 58 apply to the APOB as to any other place of business.

Reconcile before accepting TCS. Where the platform's GSTR-8 shows supplies from a State the seller has not registered in, the mismatch will surface in the section 52(8) matching. How the supplier claims TCS credit →

Key takeaways

• A warehouse owned or managed by the ECO where a seller's stock is held must be declared as an APOB on the seller's registration.
• Failure exposes the seller to invalid e-way bill movements, incorrect place of supply determinations, and invalid invoices that put the customer's ITC at risk.
• Multiple suppliers may declare the same premises as an APOB — there is no restriction on shared use.
• The seller needs documents evidencing use of the premises and must keep records under section 35 and rules 56 to 58.
• Section 52(12)(b) expressly contemplates warehouses managed by the ECO and declared as APOBs by suppliers, so the arrangement is visible to the department.
• Failure by the ECO to answer such a notice within fifteen working days attracts a penalty up to ₹25,000 under section 52(14).
• Stock in another State needs a separate registration, not an APOB.

Read next

• Marketplace, Inventory and Aggregator: Three Models, Three GST Outcomes
• GSTR-8, GSTR-9B and Claiming TCS Credit in the Cash Ledger
• The Enrolment Number Route for Small Suppliers Selling Through an ECO

Disclaimer: Positions stated as on 5 September 2026, based on sections 25, 35 and 52(12) to 52(14) of the CGST Act, 2017 and rules 56 to 58 of the CGST Rules, 2017, as reproduced in the ICAI Handbook on E-Commerce Operators under GST (updated to 15 December 2025).