Your first Amazon settlement arrives with a deduction you never agreed to, labelled TCS. The short answer: if you sell goods through Amazon or Flipkart, you almost always need a GSTIN whatever your turnover, the platform holds back 0.5% of your net taxable sales as tax collected at source (TCS), and you only recover that money by filing your own GST returns correctly.

Three rules cause most of the confusion: who must register, how TCS works, and which returns you owe. We take them in that order, using the law as it stands on 30 September 2026.

Do You Need GST Registration to Sell on Amazon and Flipkart?

Yes, in most cases. Section 24 of the CGST Act makes registration compulsory for anyone supplying goods through an e-commerce operator (ECO), the law's term for a marketplace like Amazon or Flipkart, and the Rs 40 lakh threshold for goods doesn't shield you.

One narrow exception exists. Under Central Tax Notification 34/2023, effective 1 October 2023, a goods seller can use an enrolment number instead of full registration, provided turnover stays under the state threshold, every sale is within one state, and the seller supplies through ECOs in that state only. It fails the moment you want to ship to Mumbai or claim input tax credit.

For everyone else, registration runs through gst.gov.in. Keep your PAN, Aadhaar, photograph, bank proof and business address proof ready. If you'd rather not wrestle the portal alone, we handle GST registration for Amazon seller accounts from documents to GSTIN.

Do You Need a GSTIN in Every State Where Your Stock Sits?

Yes. If a marketplace warehouse holds your stock in a state, you need registration there. Extra warehouses in a state where you're already registered can be added as additional places of business, but a new state needs its own GSTIN.

The trade-off is real. Marketplace fulfilment gets orders out faster but can scatter your inventory across five or six states, and that means five or six sets of returns each month. Shipping from your own location keeps you at one GSTIN with slower delivery promises. Stock moved between your own GSTINs is also a taxable supply that needs an invoice.

One limitation: a single-registration scheme for small e-commerce suppliers is under discussion, and the GST Council's 57th meeting, now set for 7 October 2026, may take it up. Until it's notified, the state-wise rule applies.

What Is TCS Under GST, and How Do You Get It Back?

TCS is an amount the e-commerce operator withholds from what it owes you and deposits with the government against your GSTIN, as Section 52 of the CGST Act requires. The rate is 0.5% of your net taxable sales: 0.25% CGST plus 0.25% SGST within your state, or 0.5% IGST across states. It was 1% until 10 July 2024, so guides still quoting 1% are out of date.

Net taxable value is your taxable sales in the month minus goods returned in that month, excluding GST itself. The operator reports it in GSTR-8 by the 10th of the next month, and the amount lands in your electronic cash ledger (Services > Ledgers > Electronic Cash Ledger), where it pays down your tax. It's an advance, not a cost.

Take an illustrative month. A Bhopal seller has Rs 8,00,000 in taxable sales, mostly to Maharashtra, and Rs 50,000 comes back as returns. Net taxable value is Rs 7,50,000, so TCS at 0.5% IGST is Rs 3,750. Book that as an expense by mistake and your profit looks Rs 3,750 lower than it is.

Why Doesn't Your TCS Credit Match Your Settlement Report?

Usual causes are a late GSTR-8, a sales return booked in a different month from the sale, or a sale mapped to the wrong state's GSTIN. The credit only moves once GSTR-8 is filed, so check after the 10th before raising a ticket.

When it still doesn't tally, match settlement reports against GSTR-2A per GSTIN, line by line. It's dull work, and exactly what our accounting and bookkeeping team takes off your plate when it handles TCS under GST for ecommerce reconciliations.

How Do You Stay GST Compliant as an Online Seller?

It's a monthly cycle: report sales in GSTR-1, pay tax through GSTR-3B, and keep your books matched to marketplace reports. GSTR-1 is the statement of outward supplies; GSTR-3B is the summary return where you pay. Monthly filers file GSTR-1 by the 11th and GSTR-3B by the 20th of the next month.

Returns need care. A customer return or return-to-origin (RTO) order must appear as a credit note in GSTR-1 for the right period, and the credit note for a financial year must be issued by 30 November after that year ends or the annual return date, whichever is earlier.

Then there's filing frequency. Sellers up to Rs 5 crore turnover can pick the quarterly QRMP scheme, but we'd lean towards monthly filing once order volumes climb, because reconciling three months of marketplace data in one sitting is where errors pile up. Our note on GST compliance for online sellers covers who must file GSTR-1 monthly.

Fees are the other leak. Commission, shipping, fulfilment and advertising charges carry 18% GST, and those invoices appear in your GSTR-2B as input tax credit you can set against output tax.

This guide covers sellers of goods. Services where the operator pays the tax under Section 9(5) follow different rules.

Should You Sell as a Proprietor or Move to a Company?

A proprietorship's GSTIN is tied to the owner's PAN, so a private limited company needs a fresh registration, and unused credit moves across through Form GST ITC-02. Our guide to converting a sole proprietorship to a private limited company walks through the wider process.

Staying a proprietor is cheaper while margins are thin. A company adds liability protection and easier funding, but also ROC filings and a mandatory audit. Convert when investment or a large supplier contract is a real possibility, and plan to update every marketplace account.

What Should You Do This Week?

Work through this in order:

1. Check whether the intra-state exemption fits or you need a full GSTIN.
2. Register at gst.gov.in and add the GSTIN to each seller account.
3. List every state holding your stock and confirm you're registered there.
4. After the 10th, match last month's TCS to your cash ledger.
5. File GSTR-1 by the 11th and GSTR-3B by the 20th, with credit notes for returns.
6. Claim input tax credit on marketplace fee invoices.

If step three or four exposed a gap, it's fixable, and cheaper to fix before a notice arrives than after. If you want the monthly cycle handled for you, our return filing support for GST for ecommerce sellers covers GSTR-1, GSTR-3B and the annual return.

GST for E-Commerce Sellers: FAQs

What GST rate applies to products I sell on Amazon or Flipkart?

The rate follows your product's HSN code, not the platform. After the September 2025 rate rationalisation, most goods sit in the 5% or 18% slabs, with 40% for a narrow set of luxury and sin goods. Confirm the HSN with your CA before listing, because a wrong classification changes your liability.

How long does GST registration take for an online seller?

A standard application usually takes about seven working days, subject to officer queries. A faster three-day route exists for low-risk applicants, but reports say businesses selling only through e-commerce platforms were kept out of it so far. Plan for the longer timeline.

Can one GSTIN cover both Amazon and Flipkart?

Yes. A GSTIN belongs to your business in a state, not to a marketplace, so one registration serves every channel you sell on there. Keep channel-wise sales data separate, because each platform reports its own TCS and you'll match each one separately in GSTR-2A.

What if my TCS credit is missing from the GST portal?

First confirm the operator filed GSTR-8 for that month with your correct GSTIN. If it did, raise a ticket in your seller dashboard with the settlement report attached. You can't use credit that isn't in your cash ledger, so don't adjust your GSTR-3B until it shows.

Do I need an e-way bill to send stock to a fulfilment centre in another state?

Generally yes, when the consignment value crosses Rs 50,000, and movement between your own GSTINs also needs a tax invoice. Below that value the e-way bill isn't mandatory, but the invoice still is. Rules vary for some goods, so confirm before large transfers.