GST for E-Commerce Sellers: Registration, TCS and Returns

Selling on Amazon, Flipkart, Meesho or your own marketplace store changes how GST works for you. Here is what e-commerce sellers need to get right, from registration to claiming the TCS that marketplaces deduct.

Do you need GST registration?

For most sellers of goods, yes. GST law makes registration compulsory for anyone supplying goods through an e-commerce operator that collects tax at source (TCS), whatever their turnover. The ₹40 lakh threshold that applies to offline businesses does not protect you here.

There are limited relaxations. Service providers selling through platforms are exempt below the ₹20 lakh threshold (₹10 lakh in special category states), and small sellers of goods supplying only within their own state can, subject to conditions, sell through marketplaces under a special enrolment. If you plan to sell across states, assume you need a GSTIN before your first listing.

How TCS by marketplaces works

• The marketplace collects TCS on the net value of taxable supplies made through it. The rate is 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) since 10 July 2024.
• The marketplace reports this in its GSTR-8 return by the 10th of the following month.
• The amount appears in your GST portal, and once you accept it, it is credited to your electronic cash ledger. You can use it to pay your GST liability.

Reconcile the TCS figures in your portal with your marketplace settlement reports every month. Mismatches usually come from returns, cancellations or wrong GSTINs on the seller account.

Your returns as an e-commerce seller

• GSTR-1: report all sales, including those made through marketplaces, by the 11th (monthly) or 13th (quarterly under QRMP).
• GSTR-3B: pay tax and claim input tax credit by the 20th (monthly) or 22nd/24th (QRMP).
• GSTR-9: annual return by 31 December, if your turnover requires it.

Composition taxpayers can sell goods through marketplaces only within their own state, so if you sell across India, plan for regular monthly or quarterly returns.

Common mistakes we see

• Registering in one state but shipping from a warehouse in another without an additional place of business or separate registration.
• Not accepting TCS credit in the portal, leaving money unused in the cash ledger.
• Reporting gross sales without adjusting for returns, which inflates tax.
• Missing e-way bills for stock transfers to fulfilment centres worth more than ₹50,000.

How Singha Tax can help

We register sellers, reconcile marketplace reports with GST returns every month, and make sure your TCS credit is used. See our GST services or book a consultation.