GST for e-commerce sellers in India

An overview — and where to get real advice · Updated 15 July 2026

Read this first. We build tools for sellers; we are not chartered accountants and this is not tax advice. GST rules for e-commerce have changed repeatedly, they depend on your state, your turnover, your product category and whether you sell across state lines, and getting them wrong is expensive.

What this guide does: explain the structure clearly enough that you can have a productive conversation with a CA and know what to ask. What it does not do: tell you what to file. For that, pay a professional. It is one of the highest-return expenses in this business.

Do you need GST registration?

The general position for most sellers on Amazon, Flipkart and Meesho: yes, for most taxable goods.

The nuance that trips people up: since October 2023, eligible small suppliers of goods have been able to sell through e-commerce operators without GST registration under prescribed conditions. But that relief is narrow. Broadly, it requires that your aggregate turnover stays within the applicable threshold under Section 22 and that you make only intra-state supplies.

That last condition is the killer for most marketplace sellers. Sell to a customer in another state — which happens on your first day on Amazon — and you are making inter-state supplies, and the exemption path generally closes.

The thresholds for goods-only suppliers are commonly cited as ₹40 lakh aggregate turnover in most states and ₹20 lakh in specified lower-threshold states. But thresholds interact with everything else above.

What to actually do: ask a CA whether your specific situation qualifies. Do not decide this from a blog. The cost of getting it wrong is penalties and back-taxes; the cost of asking is a consultation fee.

TCS: the 1% marketplaces deduct

This one confuses nearly every new seller, so it is worth being precise.

E-commerce operators — Amazon, Flipkart, Meesho — are required to collect Tax Collected at Source at 1% (0.5% CGST + 0.5% SGST) on the net taxable value of sales made through their platform. They deduct it before paying you and deposit it with the government against your GSTIN.

This is not a fee. It is not money you have lost. It is your own tax, paid in advance on your behalf.

You claim it back as credit in your GST returns. The operator files GSTR-8 reporting what they collected against your GSTIN, and it flows through to your returns.

The practical failure mode: sellers who do not file returns properly never claim this credit, and it just sits there. Over a year at volume, that is a meaningful amount of your own money that you have simply left with the government.

Input credit on platform fees

Remember all that 18% GST that Amazon, Flipkart and Meesho charge on their fees? It is not a sunk cost.

That GST is input tax credit. If you are registered, you can generally claim it against your output GST liability. The platforms issue tax invoices for their fees, and those invoices are your basis for the claim.

This matters more than sellers realise. If you are paying ₹150 in fees per order with ₹27 of GST on top, across a thousand orders a month that is ₹27,000 of credit. Sellers who do not claim it are effectively paying an extra 18% on all their platform fees for no reason.

Same logic applies to GST on other business inputs — packaging, courier services, and so on. Keep the invoices.

The vocabulary you will encounter

So you can follow the conversation with your accountant:

GSTIN — your GST identification number. The platforms need it. TCS — Tax Collected at Source. The 1% marketplaces deduct and deposit for you. GSTR-8 — the return e-commerce operators file, reporting the TCS they collected against each seller. GSTR-1 / GSTR-3B — your own returns. Outward supplies and the summary return respectively. Input tax credit (ITC) — GST you paid on business inputs that you can set against GST you owe. Aggregate turnover — your total turnover across all your business, computed on a PAN-India basis. Not just this one marketplace. Intra-state vs inter-state — within your state versus across state lines. Determines CGST+SGST versus IGST, and matters for the registration exemption.

How to keep this from becoming a problem

Get a CA before you need one. The consultation costs less than one month of a mistake.
Download your monthly reports from every platform. Sales, fees, TCS, tax invoices. Do it monthly; retrieving a year of history later is a bad afternoon.
Keep every tax invoice for fees. That is your input credit.
Reconcile your TCS. What the platforms report should match what you claim.
File on time. Late filing penalties are small individually and add up in a way that is genuinely irritating.
Do not take tax advice from seller WhatsApp groups. Including confident advice. Especially confident advice.

Frequently asked questions

Do I need GST to sell on Amazon or Flipkart?

For most taxable goods, generally yes. A narrow exemption exists for small suppliers making only intra-state supplies within threshold limits, but selling to another state — which happens immediately on a national marketplace — typically closes that path. Confirm your specific situation with a chartered accountant.

What is TCS on e-commerce sales?

Tax Collected at Source — 1% (0.5% CGST + 0.5% SGST) on the net taxable value of your sales, which the marketplace deducts before paying you and deposits against your GSTIN. It is not a fee; it is your own tax paid in advance, which you claim back through your returns.

Can I claim the GST that Amazon charges on its fees?

Generally yes, as input tax credit, if you are registered and hold the platform's tax invoices. Sellers who do not claim it are effectively paying an extra 18% on all their platform fees unnecessarily. Confirm the mechanics with your accountant.

What is the GST registration threshold for online sellers?

Commonly cited as Rs 40 lakh aggregate turnover for goods-only suppliers in most states and Rs 20 lakh in specified states — but for marketplace sellers, the inter-state supply condition usually matters more than the threshold. Ask a CA about your case.

Should I file GST myself or use an accountant?

For most sellers, an accountant. The fee is small relative to the cost of a filing error, and a good CA will typically find enough input credit you were missing to cover their own cost.

Sources and further reading

Marketplace fees and policies change. These are the official pages to check for the current numbers before you make a pricing decision:

GST Portal (Government of India) · CBIC — Central Board of Indirect Taxes and Customs