How does one get a government issued certificate for a new e-commerce business being run as a Sole Proprietorship in India?

You should be able to register for service tax registration, which should give you that certificate that you are seeking. The best answer however would be from your chartered accountant as he would know the legal/tax implications of these things.

There is no government issued certificate for sole proprietorships and registration for VAT or service tax would give you some government recognition (which you need to register for is another question altogether - what products/services do you sell, do you charge for delivery, etc) but i do not believe this would be sufficient for the payment gateway. As suggested by Gaurav, incorporation of a private limited company (or even an LLP) would hold you in better shape moving forward. We have a blog dedicated to helping you start your business (http://easylawstartyourbusiness.blogspot.in/) and running your business (http://easylaw-running-your-business.blogspot.in/) you may find some content useful - Incase, you want more specific guidance - feel free to post your questions (to get free answers to your queries) or projects (to get free quotations on work you need done) on http://www.easylaw.in/! Good luck!

Hi as you mentioned you are a e-commerce site. Alon with it you would be providing other services also. So once your sales cross 5lakh, you will need VAt registration and also if the services you provide exceed 9 lakh you will need service tax registration. And these 2 documents are enough proof for your firms esixtance. However you mentioned company, company is different from proprietor or partnership firm and for companies you get the Registration certificate from ROC. You need to apply to ROC for that. Once your company is registered you can use Private Limited in it.