GST for Amazon & Flipkart Sellers India 2025: The Complete Compliance Guide

One of the most common mistakes new online sellers make in India: assuming that since their monthly sales are below ₹40 lakh, they don't need to register for GST. <strong>This assumption is wrong — and expensive.</strong>

What Is GST for Amazon and Flipkart Sellers?

GST for online sellers refers to the specific set of registration, tax collection, and filing rules that apply to anyone selling goods or services through an e-commerce operator such as Amazon, Flipkart, or Meesho. Unlike regular businesses, e-commerce sellers face a mandatory registration requirement with no turnover exemption, plus a unique TCS (Tax Collected at Source) mechanism that marketplaces apply automatically on every sale.

This guide covers everything online sellers need to know: why registration is mandatory, how TCS affects your cash flow, what returns to file, and how to stay compliant without drowning in paperwork.

Why Is GST Registration Mandatory for All Online Sellers?

Section 24 of the CGST Act, 2017 mandates GST registration for persons making taxable supplies through an e-commerce operator — there is no turnover threshold exemption.

This applies to sellers on: Amazon India, Flipkart, Meesho, Myntra, Snapdeal, Nykaa, any other marketplace that collects payment on behalf of sellers

The only exception: sellers of services that are exempt from GST (e.g., certain educational or healthcare services). If you're selling physical goods or taxable services, you must register.

Official GST Portal — gst.gov.in

What Is TCS and How Does It Work?

TCS (Tax Collected at Source) is the mechanism through which e-commerce marketplaces collect GST on your behalf.

Under Section 52 of the CGST Act:

• The marketplace (Amazon, Flipkart, etc.) is required to collect 1% TCS (0.5% CGST + 0.5% SGST, or 1% IGST for inter-state) on the net value of taxable supplies made through their platform
• They deposit this TCS directly with the government
• They issue you a TCS certificate (through Form GSTR-8) every month

How TCS Affects Your Cash Flow

Say you sold ₹1,00,000 worth of goods on Amazon in a month:

Your ₹1,000 TCS is not lost — it's credited to your Electronic Cash Ledger on the GST portal and can be used to offset your GST liability when you file GSTR-3B.

How to Claim Your TCS Credit

Amazon and Flipkart file GSTR-8 by the 10th of the following month. Your TCS appears in your cash ledger after they file. Don't expect it before the 10th.

Which GST Returns Must Online Sellers File?

As a regular GST-registered online seller, you must file:

GSTR-1 — Report All Sales

File monthly (if turnover > ₹5 Cr) or quarterly under QRMP (if ≤ ₹5 Cr).

For online sellers, GSTR-1 includes: B2B invoices (if you sell to registered businesses), B2C sales summary (marketplace sales to end consumers), credit notes for returns and cancellations

Amazon and Flipkart provide monthly sales reports — download these and reconcile them with your own invoice records before filing GSTR-1.

GSTR-3B — Summary Return & Tax Payment

Filed monthly or quarterly. This is where you: declare total sales (now auto-populated from GSTR-1 from July 2025), claim ITC on business purchases, offset TCS credit from cash ledger, pay net GST liability

GSTR-9 — Annual Return (If Turnover > ₹2 Crore)

Filed once a year by 31 December. Reconciles your entire year's GSTR-1 and GSTR-3B data.

How Does Multi-State Selling Affect IGST?

When you sell to a buyer in another state (which is almost always the case on a national marketplace), the supply is inter-state, and IGST applies instead of CGST + SGST.

For most marketplace sellers shipping from a single warehouse:

• Intra-state sales (buyer in same state as your GSTIN) → CGST + SGST
• Inter-state sales (buyer in any other state) → IGST

Do You Need a Separate GSTIN for Each State?

Generally no — if you're selling from a single location and the goods are shipped from your registered state to customers in other states, one GSTIN suffices.

When you DO need multi-state registration:

• You have a warehouse or fulfilment centre in another state (e.g., enrolled in Amazon FBA with stock in a Delhi and Mumbai warehouse)
• You have an office, agent, or branch in another state

Amazon's Fulfilment by Amazon (FBA) is a common trigger — if Amazon stores your inventory in their warehouse in a different state, you're making an intra-state supply from that state and need a GSTIN there too.

What ITC Can Online Sellers Claim?

You can claim Input Tax Credit on:

Key point for resellers: You can claim ITC on goods you purchase for resale, but you must match your claims to GSTR-2B. Only claim ITC that appears in your GSTR-2B — claiming ITC on purchases not reflected there is a compliance risk.

How Do You Handle GST on Returned Orders?

Product returns are a reality of e-commerce. Here's how to handle them for GST:

When a Customer Returns a Product

Marketplace Handles Returns on Your Behalf

Amazon and Flipkart typically issue the refund to the customer themselves and adjust it against your seller account. You'll see the return reflected in your monthly settlement report. Include these as credit notes in your GSTR-1.

How Does GST Apply to Marketplace Platform Fees?

The GST you pay on Amazon/Flipkart commissions and fees is eligible for ITC — and it's significant, especially for high-volume sellers.

Amazon India charges 18% GST on: referral fees (commissions), FBA fulfillment fees, monthly subscription fees, advertising charges

These GST amounts appear in Amazon's monthly tax invoice to you. Download it from Seller Central → Reports → Tax Document Library and ensure each invoice is in your GSTR-2B before claiming ITC.

Practical GST Compliance Calendar for Online Sellers

Common GST Mistakes Online Sellers Make

Mistake 1 — Not Registering Because Turnover Is Below ₹40 Lakh

The ₹40 lakh threshold does not apply to e-commerce sellers. Registration is mandatory from the first sale.

Mistake 2 — Not Claiming TCS Credit

Many new sellers don't know their TCS credit is sitting in their cash ledger. This is money already paid to the government on your behalf — claim it in every GSTR-3B.

Mistake 3 — Treating All Sales as Intra-State

If you're shipping to a buyer in another state, it's an inter-state supply and IGST applies. Filing CGST + SGST for inter-state supplies is wrong and creates audit issues.

Mistake 4 — Not Reconciling Marketplace Reports

Your GSTR-1 must match what the marketplace has reported in GSTR-8. Discrepancies between your returns and the marketplace's TCS filings trigger automated notices.

Mistake 5 — Ignoring FBA Multi-State Registration

If Amazon stores your goods in their warehouse in another state, you need a GSTIN in that state. Ignoring this means you're making unregistered inter-state supplies — a serious compliance violation.

Mistake 6 — Missing Annual GSTR-9

Sellers who cross ₹2 Crore turnover (which is easy on major marketplaces) must file GSTR-9 by 31 December. Late fee is ₹200/day.

GST on Different Marketplaces — Key Differences

The TCS rate and mechanism is identical across all marketplaces — it's set by law, not by the platform.

Conclusion

Selling on Amazon and Flipkart is one of the fastest ways to scale a business in India — but it comes with non-negotiable GST compliance obligations that many sellers underestimate at the start.

Your e-commerce GST checklist:

Use our GST Calculator to calculate the correct CGST/SGST/IGST split for any sale — particularly useful when reconciling intra-state vs inter-state orders from your marketplace reports.

Related: GST on E-commerce India · GST for Freelancers India · Input Tax Credit Under GST

GST for Amazon and Flipkart Sellers — Frequently Asked Questions