Starting an online retail business in Delhi allows entrepreneurs to sell products through their own website, mobile application, social media channels or online marketplaces. Unlike a conventional retail store, an online business may operate without a customer-facing physical shop, but it still needs to comply with applicable business, tax, consumer-protection and product-related requirements.
The exact requirements depend on whether the business sells its own products, resells third-party products, imports goods, manufactures or packages products or operates through an e-commerce marketplace.
At Remind Legal LLP, we assist businesses with registrations, documentation and regulatory compliance required for setting up an online retail business in Delhi.
Planning to start an online retail business in Delhi? Get professional assistance with the applicable registrations and compliance requirements.
Online retail businesses deal directly with consumers and may collect payments, customer information and delivery details while making product, price, return and warranty representations online.
Proper compliance helps the business maintain transparent customer practices, meet applicable tax and product requirements and reduce the risk of regulatory or consumer disputes.
There is no single universal “Online Retail Licence” applicable to every e-commerce seller. The required registrations depend on the business structure, sales channel, products sold, packaging activities and other operations.
Step 1: Choose Business Structure
Choose an appropriate legal structure for the online retail business.
Common options include: -
The right and appropriate structure basically depends on ownership, liability, investment needs, taxation and future expansion plans.
A small online seller may initially operate as a proprietorship, while an LLP or private limited company may be considered for businesses involving multiple promoters or larger operations.
Step 2: Complete PAN, TAN & Basic Business Registration
Obtain PAN for the proprietor or business entity, as applicable, for taxation and business-related transactions.
If you establish an LLP or company, complete the applicable incorporation process and obtain the relevant incorporation documents.
TAN, Where Applicable
TAN is not required merely because you operate an online retail business. It becomes applicable where the business is required to deduct or collect tax at source (TDS/TCS) under the various applicable tax provisions.
Step 3: Establish a Business Address / Principal Place of Business
An online retail business does not necessarily need a customer-facing physical shop. However, it should have an appropriate business or principal place of business for applicable registrations, correspondence and business records.
Depending on the business model, the address may be an appropriate: -
Where inventory is stored at a separate warehouse or fulfilment centre, additional premises and storage requirements should be assessed separately.
The business should maintain appropriate ownership, rent/lease or other address documents required for the registrations it obtains.
Step 4: Open a Current Bank Account
Open a current bank account in the name of the online retail business or entity.
A dedicated business account helps maintain proper records of customer payments, marketplace settlements, supplier payments, refunds, advertising expenses and other business transactions.
The bank may require PAN, incorporation/business-registration documents, address proof and applicable KYC documents depending on the business structure.
Step 5: Obtain GST Registration, Where Applicable
An online retailer should determine whether GST Registration is required according to its turnover, mode of sale, nature of supplies and the applicable GST provisions.
The GST position can differ depending on whether goods are sold through the business's own website or through an e-commerce operator.
Importantly, GST Registration should not be described as automatically mandatory for every small seller merely because goods are supplied through an e-commerce operator. Specified suppliers of goods making intra-State supplies through e-commerce operators may operate without GST registration where the prescribed exemption conditions are satisfied.
Once registered, the business should comply with applicable invoicing, tax-payment, return-filing and record-keeping requirements.
Step 6: Set Up Website / Online Marketplace & Payment System
Choose how the products will be sold online.
The business may use: -
Where the business operates its own website, appropriate product information, pricing, payment options, delivery information, return/refund policies, contact details and other legally required disclosures should be displayed.
Payment arrangements should also be established through appropriate banking or payment-service providers.
Step 7: Follow Consumer Protection & E-Commerce Compliance
Online retail businesses should comply with the applicable provisions of the Consumer Protection Act, 2019 and the Consumer Protection (E-Commerce) Rules, 2020, as amended.
The applicable obligations differ according to whether the business operates as an inventory e-commerce entity, marketplace or seller using a marketplace.
Depending on the business model, relevant requirements can include: -
Inventory e-commerce entities are specifically required to provide prescribed information relating to matters such as returns, refunds, exchanges, warranties, delivery, payment methods and grievance redressal.
Advertisements should also remain consistent with the actual characteristics and conditions of the products being sold.
Step 8: Follow Legal Metrology & Product Labelling Compliance, Where Applicable
Online businesses selling pre-packaged commodities should assess the applicable requirements under the Legal Metrology framework.
Depending on the product and the role of the business, prescribed declarations can apply to product packaging and online displays.
Requirements may concern information such as: -
Assess the registration requirements separately where the online retailer also acts as a manufacturer, packer or importer.
Therefore, a normal retailer reselling properly packaged goods should not automatically be described as requiring the same Legal Metrology registration as a manufacturer, packer or importer.
Step 9: Follow Data Protection & Privacy Compliance
Online retail businesses commonly collect and process customer information for account creation, payments, order fulfilment, delivery and customer support.
Depending on the business model, this may include: -
The business should assess or examine its obligations under the applicable Digital Personal Data Protection framework and maintain the appropriate privacy practices.
Customer information should be collected and processed for legitimate business purposes and protected through appropriate organisational and technical safeguards.
The website or application should also provide appropriate privacy-related information and mechanisms according to the applicable requirements.
Step 10: Follow Advertising & Online Marketing Compliance
Online retailers frequently promote the products through websites, search engines, social media, influencers, email campaigns and digital advertisements.
Marketing claims should be accurate and should not mislead consumers regarding: -
Applicable consumer-protection and advertising requirements should be considered when preparing promotional campaigns.
The business should also avoid deceptive online interface practices and assess the applicable consumer-protection requirements relating to dark patterns.
Step 11: Obtain Product-Specific Registration/Licence, Where Applicable
The licences required for an online retail business depend significantly on the products being sold.
Examples include: -
The applicability of these requirements should be assessed before listing or selling regulated products.
FSSAI, BIS, IEC or similar registrations should not be presented as universally mandatory for every online retailer.
Step 12: Follow Packaging & EPR Compliance, Where Applicable
An online retail business should assess whether its packaging or products trigger the Extended Producer Responsibility (EPR) or various other waste-management obligations.
For example, the plastic-packaging EPR framework places obligations on specified producers, importers and brand owners. Similar specialised frameworks may apply to certain regulated product or waste categories.
Whether an online retailer has EPR obligations therefore depends on its actual role in relation to the product and packaging.
A business that manufactures, imports, sells products under its own brand or introduces regulated packaging may have different obligations from a retailer merely reselling products supplied by another compliant manufacturer or brand owner.
Step 13: Comply with Applicable Labour Laws
Where the online retail business employs the administrative staff, customer-support executives, warehouse employees, packing staff or other workers, applicable employment requirements should be followed.
These may include requirements concerning: -
The Delhi Labour Department currently states that registration under the Delhi Shops and Establishments Act has been kept in abeyance since 1989. However, substantive employment-condition provisions under the framework continue to remain relevant.
Step 14: Complete EPF & ESI Compliance, Where Applicable
EPF and ESI requirements should be assessed according to establishment coverage, workforce, wage criteria and other applicable statutory conditions.
They should not be treated as automatically mandatory merely because an online retail business has been established.
As the business expands and employs additional personnel, its applicable social-security obligations should be reviewed.
Step 15: Obtain Udyam Registration – Recommended for Eligible MSMEs
An eligible online retail business may consider Udyam Registration under the applicable MSME framework.
Udyam Registration is not mandatory merely because products are sold online. However, eligible retail enterprises may consider registration for benefits available to them under the applicable framework.
Step 16: Obtain Trademark Registration – Optional but Advisable
Building a recognisable brand is particularly important for online retailers.
Trademark Registration is optional but advisable where the business uses a distinctive brand name, logo or other mark.
Registration can help protect the business's brand identity and reduce the risk of another entity using a confusingly similar mark for the related goods or services.
An online retail business may require additional compliance depending on what it sells and how it operates.
These can include: -
A business should therefore review the regulatory requirements for its product category before beginning online sales.
Documents Required
The exact documents depend on the business structure, products and registrations required.
Basic Documents
Business Registration Documents
Depending on the structure: -
Online Retail & Product Documents
Depending on the business model: -
An online retail business can offer several commercial advantages, including: -
Businesses can also expand gradually by adding new product categories, sales channels, warehouses or fulfilment arrangements according to demand.
Estimated Timeline
The overall timeline depends on the type of registrations required, completeness of documentation and processing time taken by the respective government authorities.
Since different approvals are issued by separate departments, the time required may vary depending on the nature and scale of your online retail business.
Government Fees
Government fees vary depending on the applicable registration, licence category and regulations applicable at the time of application.
Professional fees depend on the scope of services required and the specific compliance requirements of your online retail business.
Setting up an online retail business requires identifying not only the basic business registrations but also the consumer-protection, product, tax, packaging and online compliance requirements applicable to the products being sold.
Remind Legal LLP can assist businesses in identifying the applicable requirements and completing the relevant registrations and regulatory documentation.
Our Services Include: -
Need help navigating online retail registrations and compliance in Delhi? Remind Legal LLP can assist you from business setup to applicable regulatory approvals.