GST for Amazon & Flipkart Sellers 2025: Rates, Registration & Free Calculator
If you sell products online through Amazon, Flipkart, Meesho, Myntra, or any other marketplace in India, GST has specific rules that apply only to e-commerce transactions. Moreover, these rules differ significantly from regular offline selling. Furthermore, non-compliance — even unintentionally — can result in blocked seller accounts, tax demands, and penalties that disrupt your business.
- GST registration is mandatory for all e-commerce sellers in India — there is no turnover-based exemption, unlike offline businesses.
- Marketplaces deduct 1% TCS (Tax Collected at Source) from every payout, which appears as a credit in your GST electronic cash ledger.
- Marketplaces like Amazon and Flipkart must file GSTR-8 monthly, and your TCS credit shows up in your GSTR-2B by the 10th of the next month.
- E-commerce sellers are explicitly barred from the GST Composition Scheme under Section 10(2) of the CGST Act.
- Reconciliation requires matching marketplace sales reports against GSTR-2B and GSTR-1 across multiple states and rate slabs.
- Returns are handled through credit notes, which reverse the original output tax liability in the period they are issued.
Additionally, the e-commerce GST framework involves a mechanism called Tax Collected at Source (TCS) that most new online sellers discover only when they notice money being deducted from their marketplace payouts. Consequently, understanding TCS — and how to reconcile it — is essential for every e-commerce seller on any Indian platform.
Is GST Registration Mandatory for Amazon and Flipkart Sellers?
This is the single most important difference between online and offline selling under GST. Specifically, offline businesses below ₹40 lakhs (goods) or ₹20 lakhs (services) turnover are exempt from mandatory GST registration. However, e-commerce sellers are explicitly excluded from this exemption under Section 24 of the CGST Act. Consequently, even a seller with ₹1 lakh annual turnover on Amazon must obtain GST registration before making their first sale.
Furthermore, this rule applies across all platforms — Amazon India, Flipkart, Meesho, Nykaa, Myntra, Snapdeal, and any other marketplace. Moreover, it applies whether you are an individual selling handmade crafts or a business selling manufactured goods. As a result, the very first step before listing products on any marketplace is obtaining a GSTIN.
What Is TCS Under GST — and Why Are Marketplaces Deducting from Your Payout?
Tax Collected at Source (TCS) under GST is governed by Section 52 of the CGST Act. Specifically, every e-commerce operator — Amazon, Flipkart, Meesho — must deduct 1% TCS (0.5% CGST + 0.5% SGST for intra-state, or 1% IGST for inter-state) from every payment made to you. Moreover, this deduction happens automatically before the marketplace transfers your settlement amount.
Customer pays: ₹10,000 (inclusive of GST) to Amazon at checkout.
TCS deducted: 1% of net value = ₹85 (approximately, after removing the GST component).
Payout to seller: ₹10,000 minus Amazon commission minus TCS minus other charges.
Your benefit: The ₹85 TCS appears as a credit in your GST electronic cash ledger — available to offset your GST liability. Consequently, TCS is not a loss — it is an advance tax credit.
Marketplace GST Obligations — What Amazon, Flipkart, and Meesho Must Do
E-commerce operators have their own GST compliance obligations. Specifically, every marketplace must register for GST across all states where it operates — regardless of turnover. Furthermore, they must file GSTR-8 monthly, declaring all TCS collected from sellers and remitting it to the government. Additionally, they must provide sellers with a statement of TCS deductions, which feeds into the seller's GSTR-2B for reconciliation purposes.
As a result, TCS deducted by your marketplace appears in your GSTR-2B by the 10th of the following month. Consequently, you can claim this credit in your GSTR-3B to reduce your net GST payable. Furthermore, if TCS credits exceed your GST liability for a period, you can claim a cash refund from the government — though this process requires filing a specific refund application.
How to Reconcile Your E-Commerce Sales for GST Filing
Most e-commerce sellers struggle with reconciliation because their sales involve multiple states, different GST rates across products, and marketplace deductions. Moreover, the volume of transactions makes manual reconciliation impractical. Consequently, a systematic approach is essential.
Download your sales report from the marketplace. Specifically, Amazon's Seller Central and Flipkart's Seller Hub provide downloadable transaction reports with order-level GST details.
Classify by state of buyer. Furthermore, each sale must be classified as intra-state (CGST+SGST) or inter-state (IGST) based on the delivery state versus your registered state.
Reconcile with GSTR-2B. Specifically, check that TCS credits appearing in GSTR-2B match the TCS deductions shown in your marketplace settlement statements.
Report in GSTR-1. Moreover, all sales must be declared invoice-by-invoice (or in aggregate for B2C sales below ₹2.5 lakh per state) in GSTR-1 by the 11th of the following month.
File GSTR-3B. Consequently, pay the net GST liability after offsetting ITC on purchases and TCS credits. Additionally, declare TCS credits claimed in the relevant table of GSTR-3B.
Can E-Commerce Sellers Use the Composition Scheme?
No. Explicitly, e-commerce sellers are barred from opting for the GST Composition Scheme under Section 10(2) of the CGST Act. Specifically, any business making supplies through an e-commerce operator — regardless of turnover — must be a regular GST registrant. Consequently, if you started as a composition dealer and want to start selling online, you must convert to regular GST registration first.
GST on Returns, Cancellations, and Refunds in E-Commerce
Returns are a significant volume event for e-commerce sellers. Specifically, when a customer returns an order, the original GST liability must be reversed. Moreover, this is handled through a credit note — issued by you (the seller) against the original tax invoice. Furthermore, the credit note reduces your output tax liability in the period it is issued. Consequently, returned goods should not lead to permanent GST costs if credit notes are raised correctly and within the same financial year.
For calculating GST on individual product listings at different rate slabs, use our free GST calculator. Additionally, to understand why e-commerce sellers cannot use composition scheme, see our guide on the GST Composition Scheme. Furthermore, for how to handle inter-state sales and the CGST/IGST classification, read our article on CGST vs SGST vs IGST.
GST Portal — e-commerce seller registration
CBIC — Section 52, CGST Act (TCS provisions)
GST for E-Commerce Sellers — Frequently Asked Questions
Is GST registration mandatory for Amazon and Flipkart sellers?
Yes, for every seller regardless of turnover. Unlike offline businesses, e-commerce sellers are excluded from the standard ₹40 lakh / ₹20 lakh registration exemption under Section 24 of the CGST Act.
What is TCS and why is it deducted from my payout?
TCS (Tax Collected at Source) is 1% deducted by the marketplace from every payment to you under Section 52 of the CGST Act. It is not a loss — it appears as a credit in your GST electronic cash ledger to offset your GST liability.
Can e-commerce sellers use the GST Composition Scheme?
No. Section 10(2) of the CGST Act explicitly bars any business selling through an e-commerce operator from opting for the Composition Scheme.
How do I reconcile TCS for GST filing?
Check that TCS credits in your GSTR-2B match the deductions in your marketplace settlement statements, then claim the credit in GSTR-3B after reporting all sales in GSTR-1.
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