If you sell on Amazon, Flipkart, Meesho, JioMart or AJIO, GST is part of your business from day one. It decides whether you can sell across India, how much tax the marketplace deducts from your payouts, and whether you can claim credit on the GST you pay on marketplace fees. Yet GST is one of the most confusing topics for new e-commerce sellers.
This guide explains GST for online sellers in India in simple language: when registration is required, how TCS works, which returns you need to file and the compliance mistakes to avoid.
Note: GST rules change from time to time. This article is general guidance – always confirm your specific case with a qualified tax professional.
Is GST Registration Mandatory for E-commerce Sellers?
For a long time, anyone selling goods through an e-commerce operator (ECO) like Amazon or Flipkart had to register for GST, regardless of turnover. Since October 2023, the rules have been relaxed for small sellers:
- Small, unregistered suppliers whose turnover is below the GST threshold can sell goods through e-commerce platforms within their own state using an enrolment ID from the GST portal, without full GST registration.
- Composition scheme taxpayers can also supply goods through e-commerce platforms, again only intra-state (within their own state).
- If you want to sell to customers in other states, you need a regular GST registration.
In practice, most growing brands choose regular GST registration because it unlocks pan-India selling, all marketplace categories and input tax credit on fees, packaging and purchases.
Benefits of GST Registration for Online Sellers
- Sell anywhere in India – no restriction to your home state.
- Claim input tax credit (ITC) on the GST charged on marketplace commissions, shipping fees, advertising, packaging and stock purchases.
- Access to more categories and programmes on Amazon, Flipkart and other platforms.
- Business credibility – B2B buyers and brands prefer GST-registered suppliers.
- Easier funding – GST returns act as proof of turnover for loans and marketplace financing.
Documents Required for GST Registration
- PAN card of the business or proprietor
- Aadhaar card of the proprietor / partners / directors
- Photograph of the proprietor / authorised signatory
- Proof of business address (electricity bill, property tax receipt, rent agreement or NOC from owner)
- Bank account details (cancelled cheque or bank statement)
- Partnership deed, LLP agreement or certificate of incorporation (for non-proprietors)
Want it done without the paperwork headache? Govendor’s GST Registration service takes care of the application, document checks and follow-ups.
What Is TCS Under GST and How Does It Affect Your Payouts?
Under Section 52 of the CGST Act, e-commerce operators must collect Tax Collected at Source (TCS) on the net value of taxable supplies made by sellers through their platform.
- Current TCS rate: 0.5% (0.25% CGST + 0.25% SGST for intra-state sales, or 0.5% IGST for inter-state sales), effective from 10 July 2024. Before that, the rate was 1%.
- Calculated on: net taxable value – i.e. sales minus returns.
- Who deposits it: the marketplace, which files GSTR-8 every month.
Example
Suppose your net taxable sales on a marketplace in a month are ₹2,00,000. The marketplace deducts 0.5% TCS = ₹1,000 from your payout and deposits it with the government in your name.
How to claim the TCS credit
TCS collected by the marketplace appears on the GST portal against your GSTIN. Once you accept it, the amount is credited to your electronic cash ledger, and you can use it to pay your GST liability. Always reconcile the TCS shown on the portal with your marketplace payment reports every month.
GST Returns Online Sellers Need to File
| Return | What it covers | Frequency |
|---|---|---|
| GSTR-1 | Details of outward supplies (your sales) | Monthly, or quarterly under the QRMP scheme |
| GSTR-3B | Summary return and tax payment | Monthly, or quarterly under QRMP |
| GSTR-9 | Annual return | Yearly (if applicable to your turnover) |
| CMP-08 / GSTR-4 | For composition taxpayers | Quarterly / yearly |
Online sellers must report sales made through each e-commerce operator separately (with the operator’s GSTIN) in GSTR-1, so that your data matches the marketplace’s GSTR-8.
GST Rates and HSN Codes for Your Products
Each product is taxed according to its HSN code. Following the GST rate rationalisation in September 2025, most goods now fall into the 5% or 18% slabs, with a higher rate for a small list of sin and luxury goods. Choosing the correct HSN code on your marketplace listing is essential – a wrong code can mean charging the wrong tax, mismatched returns and notices later.
Tip: Check the GST rate for every SKU before listing, and update your marketplace tax settings whenever rates change.
GST on Marketplace Fees – Don’t Leave Money on the Table
Amazon, Flipkart, Meesho and other platforms charge GST (generally 18%) on their commissions, shipping fees, advertising and other services. These invoices are available in your seller panel each month. If you are GST-registered, you can usually claim this as input tax credit, which directly improves your margin. Many small sellers forget to claim it.
Use the Amazon, Flipkart and Meesho calculators on Govendor to understand how fees and GST affect your profit per order.
Common GST Mistakes E-commerce Sellers Make
- Selling inter-state without regular GST registration while using an enrolment ID or composition scheme.
- Wrong HSN codes or tax rates on listings.
- Not reconciling marketplace sales and returns with GSTR-1 and the TCS shown on the portal.
- Missing ITC claims on marketplace fee invoices.
- Late filing, which attracts late fees, interest and can lead to GSTIN suspension – and a suspended GSTIN can block your marketplace account.
- Not updating additional places of business when using marketplace warehouses (for example, FBA fulfilment centres in other states).
A Simple Monthly GST Checklist for Online Sellers
- Download sales, returns and tax reports from every marketplace.
- Download fee invoices and collect purchase invoices for ITC.
- Reconcile marketplace data with your books.
- File GSTR-1 with e-commerce operator-wise details.
- Accept TCS credit on the GST portal.
- File GSTR-3B and pay any balance tax on time.
How Govendor Helps Online Sellers With GST and Compliance
Govendor is a full-service e-commerce management agency. Along with marketplace account management for Amazon, Flipkart, Meesho, JioMart and AJIO, we help sellers with GST registration & compliance, trademark registration and business documentation – so your store stays compliant while you focus on growth.
Need help getting GST-ready? Talk to Govendor or call +91 95606-31888.
Frequently Asked Questions
Can I sell on Amazon or Flipkart without a GST number?
Small sellers below the GST threshold can sell goods within their own state using a GST enrolment ID, where the marketplace supports it. To sell to customers in other states, you need regular GST registration.
What is the current TCS rate for e-commerce sellers?
The TCS rate under Section 52 is 0.5% of net taxable sales, effective from 10 July 2024 (earlier it was 1%).
Can I claim GST paid on Amazon and Flipkart commissions?
Yes. GST-registered sellers can generally claim input tax credit on GST charged on marketplace fees, provided invoices are reflected correctly and conditions under GST law are met.
Can a composition dealer sell online?
Yes, since October 2023 composition taxpayers can supply goods through e-commerce operators, but only within their own state.
Does Govendor provide GST registration?
Yes. Govendor offers GST registration and compliance support along with complete marketplace management.
