Who Is an E 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.
Almost every GST question about a digital business starts here, and almost every wrong answer starts with the same assumption: that you have to own the platform to be an e-commerce operator. You do not.
Section 2(44) defines "electronic commerce" as the supply of goods or services or both, including digital products, over a digital or electronic network. Section 2(45) defines an "electronic commerce operator" as any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce. The three verbs are alternatives — operational control or administrative supervision is enough without ownership, which is what brings franchisees and the Indian arms of foreign platforms inside. Where more than one ECO is involved in a single supply, Notification No. 37/2023-CT dated 04.08.2023 fixes the ECO as the one who finally releases the payment to the supplier.
Section 2(44): four elements of "electronic commerce"
"Electronic commerce" means the supply of goods or services or both, including digital products over digital or electronic network.
The Handbook breaks it into four conditions:
- (a) There must be a supply through one of the modes — sale, transfer, exchange, lease, or provision of goods or services.
- (b) The supply must be of goods or services or both — furniture, cleaning services, interior decoration.
- (c) The supply may be of digital products — OTT subscriptions, e-books, software utilities.
- (d) The supply is made over a digital or electronic network — internet-based models such as mobile apps or cloud-based systems, or other communication systems such as websites, servers or emails.
Limb (d) is broader than most people assume. The Handbook's own table of qualifying facilities includes not only mobile apps and websites but API-based search engines that connect vendors and customers on search criteria, cloud-based software subscriptions, and even email-based ordering — membership models where suppliers promote goods or services through mailers and customers respond by email.
An email-based ordering system is electronic commerce. That single example is the most useful test of whether a business has understood the definition, because nothing about it looks like a marketplace app.
Section 2(45): the three verbs
"Electronic commerce operator" means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce.
The Handbook parses it: any person as defined in GST law, who owns, operates or manages, a digital or electronic facility or platform, for electronic commerce.
Is ownership the only criterion? The Handbook answers directly: no. The platform may be owned by one person or jointly by several. "Even when ownership is not resting with such person, it will be an electronic commerce operator if it has operational control or administrative supervision over the particular platform."
Two situations it names:
(i) The franchisee model. A person who manages the website or app on behalf of the brand owner. The Handbook's example is a hotel chain with regional franchisees, each permitted to facilitate supply for the chain's hotels through their platforms. "Here, though the website and the app are owned by the hotel chain, the franchisee will be the electronic commerce operator as they are managing the platform."
(ii) Indian arms of foreign companies. The Indian entity managing the brand in India on behalf of the foreign counterpart — the Handbook's example being a cab-hailing app registered outside India that sets up an Indian arm to deliver the same services in India.
The functional description that follows is the working definition: an ECO is "an interface between multiple suppliers and multiple recipients whereby they enlist the suppliers on their platforms and then facilitate the recipients to trace or discover the supplier which best suits them and then procure the goods or services or both either in online mode or through offline mode."
When several ECOs sit in one transaction
Modern commerce breaks the chain into pieces. The Handbook describes the reality: "one electronic commerce operator may provide the marketplace platform, another may handle payment processing, and a third might manage logistics."
That raises a real question: which of them must comply with section 52?
Notification No. 37/2023-CT dated 04.08.2023 gives the directive. In any transaction involving more than one ECO, "the electronic commerce operator" for compliance purposes is the ECO who finally releases the payment to the supplier for that specific supply.
The Handbook explains why that test was chosen: it "pins the responsibility on the entity that controls the final disbursement of funds to the seller, ensuring a clear and undisputed line of compliance."
Money, not the interface, decides. The platform the customer sees may have no TCS obligation at all if it is not the one paying the seller. Multiple ECOs, ONDC, and who collects TCS →
Being an ECO does not automatically mean registering
This is where the definition connects to obligation, and the two are often collapsed.
Section 24(x) requires compulsory registration of every electronic commerce operator who is required to collect tax at source under section 52 — words inserted by the CGST (Amendment) Act, 2018 w.e.f. 01.02.2019. The Handbook draws the consequence precisely:
"Thus, if an e-commerce operator is not required to collect tax at source as per section 52, he is not required to get registration even though he is an electronic commerce operator."
Section 52(1) applies where the operator, not being an agent, collects the consideration for supplies made through it by other suppliers. So an ECO through which supplies are made but which does not collect the consideration is outside section 52 — and outside the section 24(x) compulsion.
Three obligations, three different triggers, and it is worth keeping them apart:
| Obligation | Trigger |
|---|---|
| Section 52 TCS and section 24(x) registration | The ECO collects the consideration for supplies by other suppliers, and is not an agent |
| Section 9(5) deemed-supplier liability | The service is a notified category, supplied through the ECO |
| Ordinary registration as a supplier | The ECO's own supplies — commission, platform fees, advertising |
An ECO can be inside one, two or all three. A marketplace collecting payments is inside the first and third; a food-delivery aggregator is inside all three.
The listing-only platform
The Handbook draws a line that matters for lead-generation and directory businesses. Section 9(5)'s deemed-supplier concept "will arise only if the transactions take place through the ECO":
"if a website only lists the name of the vendors or generates the lead or shares the number of the service providers say a plumber, then it would not fall within the ambit of Section 9(5) as they are just facilitating the supply but are not engaged in allocation of the service provider or collection of payments."
Two markers to test against: allocation and payment. A platform that neither assigns the service provider nor collects the money is a listing service. It may still be an ECO under section 2(45), but it carries neither the section 9(5) liability nor, absent collection of consideration, the section 52 obligation.
Key takeaways
- Section 2(44) covers supply of goods, services and digital products over any digital or electronic network — including API-based and email-based ordering.
- Section 2(45) is satisfied by owning, operating or managing the platform; operational control or administrative supervision without ownership is enough.
- A franchisee managing a brand's app, and the Indian arm of a foreign platform, are ECOs.
- Where multiple ECOs are involved, the one who finally releases payment to the supplier carries the compliance — Notification No. 37/2023-CT.
- Being an ECO does not by itself require registration — section 24(x) bites only where section 52 TCS applies.
- A listing-only platform that neither allocates the provider nor collects payment is outside section 9(5).
Read next
- Marketplace, Inventory and Aggregator: Three Models, Three GST Outcomes
- Section 9(5): The Deemed Supplier, and Why It Is Not Reverse Charge
- Multiple ECOs, ONDC and Who Collects TCS
Disclaimer: Positions stated as on 5 September 2026, based on sections 2(44), 2(45), 24(x) and 52 of the CGST Act, 2017 and Notification No. 37/2023-Central Tax dated 4 August 2023, as reproduced in the ICAI Handbook on E-Commerce Operators under GST (updated to 15 December 2025).