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

Selling through an online marketplace changes three things about GST: when you must register, the tax the platform collects from your payouts, and how you reconcile your returns against the platform's. This note covers what is different for a marketplace seller; the mechanics of filing are in the GSTR-1 and GSTR-3B walkthroughs.

Registration

• Selling goods through an e-commerce operator that collects tax at source (Amazon, Flipkart, Meesho and the like) normally requires GST registration from the first rupee — Section 24 overrides the turnover threshold.
• Small-supplier relief (since 1 October 2023): a supplier of goods through a marketplace need not take full registration if aggregate turnover is within the normal threshold, no inter-state supplies are made, and the person takes a special enrolment number for unregistered ECO suppliers on the portal.
• Selling services through a marketplace is exempt from compulsory registration up to the normal threshold (₹20 lakh, or ₹10 lakh in special-category states).
• Your own website or app, with no third-party operator collecting tax, makes you an ordinary supplier — register when you cross the threshold. Use the threshold checker if unsure.
• Fulfilment centres in other states. Holding your stock in a marketplace warehouse in another state (for example a fulfilled-by-Amazon model) can create a place of business there and a separate registration in that state. This is the most common thing sellers miss.

Tax collected at source (TCS)

• The operator deducts TCS on the net taxable value of your sales through it — net of returns and cancellations.
• The rate is 0.25% CGST + 0.25% SGST (or 0.5% IGST for inter-state), reduced from 1% in July 2024. Confirm the current rate against the operator's monthly TCS statement.
• TCS is not an extra cost — it is your own tax, collected early. It lands in your electronic cash ledger once you claim it.

Getting the TCS credit

1. The operator files GSTR-8 every month (by the 10th), reporting the supplies made through it and the TCS collected against your GSTIN.
2. On the portal go to Services → Returns → TDS and TCS Credit Received, select the period, and accept the TCS entries.
3. File that statement. The accepted TCS moves into your cash ledger, where it can be used to pay output tax in GSTR-3B.
4. Reconcile the operator's GSTR-8 figures against your own record of marketplace sales — a mismatch means either you or the operator has mis-reported, and it needs sorting before you rely on the credit.

How marketplace sales appear in your returns

• The marketplace is only a channel — you report the sales as your own supplies. Retail orders go in Table 7 (B2C) of GSTR-1; orders to a registered buyer go in Table 4 (B2B).
• Returns and cancellations reduce your taxable turnover — net them in the period they occur.
• Table 3.1.1 of GSTR-3B is only for supplies where the operator itself pays the tax under Section 9(5) (notified services such as restaurant supply or passenger transport) — a goods seller normally leaves it blank.

Input tax credit on marketplace charges

Commission, closing fees, fulfilment, storage and shipping charged by the marketplace are input services. The marketplace issues a tax invoice with GST on these; claim it as ITC, subject to it appearing in your GSTR-2B. Marketplace payout statements usually itemise the GST on each fee.

E-way bills

Goods moving above the value threshold need an e-way bill. On a marketplace order the logistics partner often generates it, but the legal responsibility can still be the supplier's — confirm who is doing it for your shipments rather than assuming.

Key takeaways

• Selling goods through a marketplace usually means compulsory registration, unless you use the small-supplier enrolment introduced in October 2023.
• The operator collects TCS (currently 0.5% of net taxable value) — claim it back through the “TDS and TCS Credit Received” statement so it reaches your cash ledger.
• Report marketplace sales as your own supplies in GSTR-1, and reconcile them against the operator's GSTR-8 every month.
• Stock held in a marketplace warehouse in another state can trigger registration in that state.
• Rates and reliefs here have changed by notification — verify the current position on gst.gov.in.