GST TCS for E-commerce Operators Under Section 52
E-commerce operators collect GST TCS on sellers' net taxable supplies and report it in GSTR-8. The rate, how sellers claim the credit, and fixing mismatches.
GST TCS under Sec. 52 CGST Act requires qualifying e-commerce operators, including marketplaces such as Amazon, Flipkart and Meesho, to collect tax on the net taxable value of eligible sellers’ supplies where the operator collects the consideration. For FY 2025-26, the rate is 0.5%, reduced from 1% from 10 July 2024. Operators deposit and report collections in GSTR-8 by the following month’s 10th; sellers claim the amount in their electronic cash ledger.
Who must collect GST TCS under Section 52?
An e-commerce operator, other than an agent, must collect TCS on eligible supplies made through its platform by other suppliers where it collects the consideration.
Sec. 52 CGST Act covers qualifying marketplaces, not every website selling online. A business selling only its own goods through its website does not collect Section 52 TCS on those sales.
Operators liable to collect TCS require registration under Sec. 24 CGST Act, with appropriate State or Union Territory registrations. Their responsibilities include calculating collections, depositing tax and filing GSTR-8.
Sellers remain responsible for invoicing, reporting sales and paying output GST. TCS does not replace these obligations. It creates a cash-ledger credit against the seller’s GSTIN, helping offset the cash required for GST payments.
What is the GST TCS rate for FY 2025-26?
The combined GST TCS rate is 0.5% throughout FY 2025-26, following the reduction effective from 10 July 2024.
| Supply type | Rate before 10 July 2024 | Rate from 10 July 2024 |
|---|---|---|
| Intra-State supply | 0.5% CGST + 0.5% SGST/UTGST | 0.25% CGST + 0.25% SGST/UTGST |
| Inter-State supply | 1% IGST | 0.5% IGST |
Notification No. 15/2024-Central Tax reduced the central component, with corresponding changes for the other components.
These are TCS rates, not the GST rates applicable to products or services. A product taxable at 18% continues to attract 18% GST; the marketplace separately collects TCS at the applicable 0.5% combined rate.
How is the net taxable value calculated?
The TCS base is the taxable value of eligible supplies made through the operator during the month, reduced by taxable supplies returned during that month.
Under Sec. 52(1) CGST Act, the calculation excludes services for which the operator pays GST under Sec. 9(5) CGST Act. This includes qualifying restaurant services supplied through food-delivery platforms.
Other important points are:
- GST and cess charged on the supplies are excluded from the TCS base.
- Exempt and non-taxable supplies do not enter the taxable-value calculation.
- Marketplace commission, advertising charges and logistics deductions do not automatically reduce the seller’s taxable sales value.
- Returns must be matched to the correct seller GSTIN and reporting period.
- Supplies by eligible unregistered goods sellers follow the special procedure explained below.
A marketplace’s net bank settlement is therefore not necessarily the value on which TCS should be calculated.
How does a worked example look in rupees?
A Bengaluru seller with ₹8,00,000 of taxable marketplace sales and ₹50,000 of returns in August 2025 has a TCS base of ₹7,50,000.
Assume all supplies are intra-State and taxable at 18%, the returns validly reduce output tax, and the marketplace charges ₹20,000 commission plus 18% GST.
| Particulars | Amount |
|---|---|
| Taxable sales | ₹8,00,000 |
| Less: taxable value of returns | ₹50,000 |
| Net taxable value | ₹7,50,000 |
| Output GST at 18% | ₹1,35,000 |
| CGST TCS at 0.25% | ₹1,875 |
| SGST TCS at 0.25% | ₹1,875 |
| Total TCS | ₹3,750 |
| Marketplace commission | ₹20,000 |
| GST on commission | ₹3,600 |
The commission does not reduce the ₹7,50,000 TCS base. The operator must deposit ₹3,750 and file GSTR-8 by 10 September 2025, unless officially extended.
If the seller can claim the ₹3,600 commission GST as input tax credit, and has no other credits or balances, the remaining cash requirement is:
₹1,35,000 − ₹3,600 − ₹3,750 = ₹1,27,650.
The ₹3,750 is a cash-ledger credit, not input tax credit or an additional final tax cost.
How do sellers claim and use TCS credit?
Sellers must review the operator’s reported entries and complete the GST portal’s TDS/TCS credit-received process to obtain electronic cash-ledger credit.
Log in, open the TDS and TCS Credit Received facility, select the period, review and accept the correct entries, and file the statement. Merely viewing or saving entries does not complete the process.
Reconcile the amounts with:
- Marketplace sales and settlement reports.
- Return, cancellation and credit-note records.
- GSTR-1 and GSTR-3B.
- The GSTIN and tax heads reported by the operator.
Sec. 52(7) CGST Act provides for credit in the electronic cash ledger. Once credited, it can be used for permitted GST payments. Excess cash-ledger balances may be claimed as a refund under Sec. 54 CGST Act, subject to the applicable procedure and adjustment of outstanding dues.
Ask the operator to correct missing or incorrect reporting rather than treating it as input tax credit.
Is GST registration compulsory for online sellers?
Registration depends on the seller’s goods or services, turnover, location and eligibility for notified exemptions.
Sec. 24 CGST Act generally requires registration for suppliers selling through operators required to collect TCS, but important relaxations apply.
From 1 October 2023, Notification No. 34/2023-Central Tax permits qualifying below-threshold goods sellers to use marketplaces without GST registration. Conditions include:
- No inter-State supply of goods.
- Marketplace supplies confined to one State or Union Territory.
- A PAN and successful portal enrolment before selling.
- Turnover remaining within the applicable registration threshold.
Under Notification No. 37/2023-Central Tax, operators do not collect TCS on these eligible unregistered sellers’ supplies, but must report the prescribed details.
Service suppliers covered by Notification No. 65/2017-Central Tax can remain unregistered up to the applicable threshold, generally ₹20 lakh, or ₹10 lakh in specified special-category States. Services covered by Sec. 9(5) CGST Act require separate treatment.
See GST for Amazon and Flipkart sellers and GST for e-commerce sellers.
How is GST TCS different from income-tax TDS?
GST TCS credits the GST cash ledger, while income-tax TDS is claimed against the seller’s income-tax liability.
For FY 2025-26 / AY 2026-27, Sec. 194-O Income-tax Act applies under the Income-tax Act, 1961. Its standard TDS rate is 0.1% from 1 October 2024, subject to applicable provisions.
Resident individual or HUF participants qualify for the ₹5 lakh annual threshold exemption if they furnish PAN or Aadhaar. Other participants do not receive this threshold relief.
GST TCS and income-tax TDS can both appear in one settlement. Reconcile them separately, including income-tax credits with Form 26AS. See TDS on e-commerce sellers.
Which compliance mistakes should sellers avoid?
The main mistakes are unclaimed cash credits, incorrect reconciliation and using the wrong GST registration.
Do not treat bank receipts as turnover, combine GST TCS with income-tax TDS, or assume marketplace reporting replaces your returns. Investigate differences arising from returns, cancellations and incorrect GSTINs monthly.
Also check warehouse registrations before dispatching stock. A warehouse within the same State may need addition as an additional place of business; stock held and supplied from another State can require a separate registration.
How SP & SC helps
SP & SC Legal and Taxation Services, Bengaluru, helps online sellers reconcile marketplace reports, claim TCS credits and resolve GST compliance issues.
We review GSTR-1, GSTR-3B, settlement deductions, refunds, warehouse registrations and notices. Our GST return filing service supports ongoing compliance.
Fees are a fixed quote after reviewing the case, with a written scope before work starts. Contact SP & SC or message WhatsApp at +91 90356 74566 to share your documents.
Frequently asked questions
These answers summarise common GST TCS questions for FY 2025-26.
What is the GST TCS rate for e-commerce?
The combined rate is 0.5% from 10 July 2024: 0.25% CGST plus 0.25% SGST/UTGST, or 0.5% IGST.
When is GSTR-8 due?
By the 10th of the following month under Sec. 52(4) CGST Act, unless officially extended.
Can I get a refund of excess TCS?
Yes. Once credited, an excess electronic cash-ledger balance can be claimed through the applicable refund process.
Is TCS collected on returned goods?
Returned taxable supplies reduce the month’s net taxable value, subject to correct reporting and reconciliation.
Is GST TCS input tax credit?
No. It is electronic cash-ledger credit, distinct from input tax credit on eligible business purchases.
Written by
SP & SC Editorial
Editorial team at SP & SC Legal and Taxation Services — practising advocates, chartered accountants, and company secretaries publishing hands-on guidance from live client files.
Next steps
What to do next
Guides help you decide. If you need an advocate, CA, or CS on your side, the SP & SC team files, drafts, and represents.
