GST for Amazon and Flipkart Sellers: TCS and GSTR-8

Short answer: Selling on e-commerce platforms like Amazon or Flipkart requires mandatory GST registration, regardless of your turnover. These platforms are required to collect Tax at Source (TCS) at 1% on the net value of your sales. This TCS amount is then deposited to the government on your behalf, and you can claim it as a credit in your Electronic Cash Ledger while filing your monthly GST returns.

Is GST Registration Mandatory for Amazon Sellers?

Yes, GST registration is mandatory from day one if you plan to sell goods through an e-commerce operator like Amazon or Flipkart. Section 24(ix) of the Central GST Act, 2017 specifies that any person supplying goods through an e-commerce operator is required to register for GST, irrespective of their annual turnover. The standard threshold limit of ₹20 lakh (or ₹40 lakh for goods in some states) does not apply to online sellers.

What is Tax Collected at Source (TCS) under GST?

TCS is a tax collection mechanism where the e-commerce operator is responsible for collecting a percentage of tax from the payments made to you, the seller. As per Section 52 of the CGST Act, operators like Amazon and Flipkart must collect TCS at a rate of 1% (0.5% CGST + 0.5% SGST for intra-state sales or 1% IGST for inter-state sales) on the net value of taxable supplies made through them. This is not an extra tax on you; it is a credit you can claim against your total GST liability.

How Do Amazon and Flipkart Calculate TCS?

TCS is calculated on the 'net value of taxable supplies'. This means the total value of taxable goods you sold through the platform in a given month, minus the value of any goods that were returned by customers during that same month. GST charged on the products is excluded from this calculation.

For example, if you sell goods worth ₹1,00,000 and have returns worth ₹10,000 in a month, TCS will be calculated on the net value of ₹90,000.

How Can I Claim My TCS Credit?

You can claim the TCS amount as a credit against your GST liability. After Amazon or Flipkart collects the TCS, they deposit it with the government and file a return called GSTR-8. This reported TCS amount will then appear in Part D of your GSTR-2B statement on the GST portal. When you file your monthly GSTR-3B return, the TCS credit is automatically transferred to your Electronic Cash Ledger. You can then use this balance to pay your outstanding GST liability, similar to how you use cash.

What is Form GSTR-8 and Why Does it Matter to Me?

Form GSTR-8 is a monthly return that must be filed by the e-commerce operator (Amazon/Flipkart) by the 10th of the following month. In this form, the operator declares the details of all sales made by sellers on their platform and the amount of TCS collected from each seller. The information filed in GSTR-8 is what populates the TCS section of your GSTR-2B. It is crucial because if the operator fails to file GSTR-8 or files it with incorrect details, your TCS credit will not appear, and you will be unable to claim it.

Which GST Returns Do I Need to File?

As an online seller, you are responsible for filing your own GST returns, independent of the operator's filings. Your primary responsibilities are:

• Form GSTR-1: A monthly statement of all your outward supplies (sales). This must be filed by the 11th of the next month. You can learn more in our GSTR-1 filing guide.
• Form GSTR-3B: A monthly summary return where you declare your total sales, claim Input Tax Credit (ITC), and pay your final GST liability. This must be filed by the 20th of the next month. Check our GSTR-3B filing guide for details.

Seller vs. E-commerce Operator: GST Responsibilities

Task	Seller (You)	E-commerce Operator (Amazon/Flipkart)
GST Registration	Mandatory under Section 24(ix), no threshold limit. See our GST registration guide.	Required as an e-commerce operator.
Tax Collection	Collect GST from the buyer on each sale.	Collect 1% TCS on the net value of your sales.
Tax Deposit	Deposit the collected GST to the government after deducting ITC.	Deposit the collected TCS to the government.
Return Filing	File Form GSTR-1 and GSTR-3B monthly.	File Form GSTR-8 monthly.
TCS Claim	Reconcile TCS details in GSTR-2B and claim credit in GSTR-3B.	Provide TCS details to the government via GSTR-8.

Worked example

Aparna, a Bengaluru-based entrepreneur, sells handcrafted leather bags on Flipkart. Her sales figures for October 2026 are as follows:

• Total Sales (excluding GST): ₹2,50,000
• Sales Returns: ₹30,000
• GST Rate on bags: 18%
• Input Tax Credit (ITC) on raw materials: ₹15,000

Here is how her GST liability and TCS will be handled:

1. Calculate Net Taxable Value for TCS:

   • Net Value = Total Sales - Sales Returns
   • Net Value = ₹2,50,000 - ₹30,000 = ₹2,20,000

2. Calculate TCS Collected by Flipkart:

   • TCS @ 1% on Net Value = 1% of ₹2,20,000 = ₹2,200

3. Calculate Aparna's GST Liability:

   • Output GST on Net Sales = 18% of ₹2,20,000 = ₹39,600

4. Calculate Net GST Payable:

   • Net GST = Output GST - Input Tax Credit (ITC)
   • Net GST = ₹39,600 - ₹15,000 = ₹24,600

5. Claim TCS and Pay Tax:

   • Flipkart will deposit ₹2,200 as TCS. This amount will be available in Aparna's Electronic Cash Ledger.
   • Aparna needs to pay a total of ₹24,600. She can use the ₹2,200 TCS credit from her cash ledger.
   • Remaining Tax to Pay = ₹24,600 - ₹2,200 = ₹22,400
   • Aparna will pay ₹22,400 through her bank account to settle her liability for the month when filing GSTR-3B.

Common mistakes

1. Ignoring GST Registration: Many new sellers assume the standard ₹20 lakh turnover threshold applies to them. For anyone selling goods on platforms like Amazon or Flipkart, GST registration is mandatory from the very first transaction.
2. Not Reconciling TCS: Failing to regularly match the TCS amount shown in your GSTR-2B with your own sales records. Discrepancies can lead to a loss of credit or future notices.
3. Forgetting to Claim TCS Credit: The TCS amount is credited to your Electronic Cash Ledger, but it is not an automatic refund. You must utilize it to pay your GST liability while filing GSTR-3B; otherwise, it just sits there.
4. Opting for the Composition Scheme: Sellers on e-commerce platforms are explicitly prohibited from using the GST composition scheme, which is a simplified tax regime for small businesses.
5. Incorrect HSN Codes: Using incorrect HSN codes for products can lead to charging the wrong GST rate, resulting in compliance issues and potential penalties.

How SP & SC helps

SP & SC Legal and Taxation Services simplifies GST compliance for online sellers. We handle everything from obtaining your GST registration to monthly filings of GSTR-1 and GSTR-3B. Our team meticulously reconciles your TCS credits, ensures you claim every rupee you are entitled to, and responds to any departmental notices. We ensure your e-commerce business remains compliant so you can focus on growth.

Frequently asked questions

Can I sell on Amazon without a GST number?

No. All major e-commerce platforms in India, including Amazon and Flipkart, require a valid GSTIN to list you as a seller, except for a few exempted categories like books.

What happens to TCS on returned products?

TCS is calculated on the "net value of taxable supplies," which means total sales minus any sales returns during the month. Therefore, no TCS is ultimately levied on products that are returned.

Where can I see the TCS deducted by Amazon?

The TCS deducted by the e-commerce operator will appear in Part D of your Form GSTR-2B, which is an auto-drafted input tax credit statement. You can view this on your GST portal dashboard after the operator files their GSTR-8.

Do I need multiple GST registrations for selling in different states?

If you use Amazon's "Fulfilment by Amazon" (FBA) service and store your goods in their warehouses in different states, you must obtain a separate GST registration for each of those states as it's considered a place of business.

Is TCS an extra tax on me?

No, TCS is not an additional tax. It is a mechanism for the government to track transactions. The amount collected is a credit available to you, which you can use to set off your final GST liability.

Get a fixed-fee quote

Navigating GST as an online seller involves many moving parts. To ensure full compliance and maximize your credit claims, it is best to have professional support. Share your documents with us, and we will provide a written, fixed-fee quote for handling your e-commerce GST compliance from end to end. Contact SP & SC or message us on WhatsApp at +91 90356 74566.