If you sell goods on a marketplace like Amazon, Flipkart or Meesho, GST registration is mandatory from your first sale — the ₹40 lakh / ₹20 lakh threshold does not apply to you. The platform deducts 1% TCS (0.5% CGST + 0.5% SGST, or 1% IGST) on your net sales and deposits it to your GST ledger. You then file GSTR-1 and GSTR-3B monthly and claim that TCS as credit.
Do You Need GST Registration to Sell Online?
It depends on what you sell and how. Under Section 24 of the CGST Act, sellers of goods through an e-commerce operator (ECO) must register regardless of turnover. A 2023 relaxation lets small service suppliers on marketplaces use the normal ₹20 lakh threshold.
| Who you are | GST needed? | Threshold | Composition |
|---|---|---|---|
| Selling goods on Amazon / Flipkart / Meesho | Mandatory | None | Not allowed |
| Selling goods on your own website | Mandatory | None | Not allowed |
| Supplying services via a marketplace | If > ₹20L | ₹20L | Not allowed |
| Supplying services on your own website | If > ₹20L | ₹20L | Not allowed |
| ECO covered under Section 9(5) (food/cab/small) | May be exempt | ₹20L | — |
Threshold is ₹10 lakh for special-category states. Composition scheme (Section 10) is barred for any e-commerce supplier. Confirm your status on the official GST portal.
Many first-time sellers assume they are exempt below ₹40 lakh. For goods sold on any marketplace this is wrong — registration is compulsory before your first listing, even for a ₹5,000/year hobby store. Selling without a GSTIN can get your account blocked and attract penalties.
How GST TCS Works on Amazon & Flipkart
Under Section 52, every e-commerce operator collects Tax Collected at Source (TCS) at 1% on the net value of taxable supplies made through it — deducts it from your payout, deposits it, and reports it in GSTR-8. It then flows to your GST ledger.
| Platform | TCS — intra-state | TCS — inter-state | Reported in |
|---|---|---|---|
| Amazon India | 0.5% + 0.5% | 1% IGST | GSTR-8 → your ledger |
| Flipkart | 0.5% + 0.5% | 1% IGST | GSTR-8 → your ledger |
| Meesho | 0.5% + 0.5% | 1% IGST | GSTR-8 → your ledger |
| Any other marketplace | 1% total | 1% IGST | GSTR-8 → your ledger |
TCS is computed on net taxable value (after returns/cancellations) and is NOT deducted on the GST component itself.
18% Sale of an ₹1,000 item
What TCS is not
TCS is not an expense — it is your own GST paid in advance by the platform. Reconcile the TCS in your electronic cash ledger against the platform's GSTR-8 every month so you actually use the credit instead of paying that GST twice.
Selling on multiple marketplaces? Get your payouts & TCS reconciled with your returns.
Get Seller GST Support →GST Returns an E-Commerce Seller Must File
As a regular registered seller you file the standard GST returns. The platform separately files GSTR-8 for the TCS — that is not your return, but its data must match yours.
| Return | What it reports | Frequency | Due date |
|---|---|---|---|
| GSTR-1 | All outward sales (B2B & B2C) | Monthly / QRMP | 11th of next month |
| GSTR-3B | Net GST after ITC & TCS credit | Monthly / QRMP | 20th of next month |
| GSTR-8 (by the platform) | TCS collected on your sales | Monthly | 10th of next month |
| GSTR-9 | Annual reconciliation | Annually | 31 December |
Turnover up to ₹5 crore can opt for the QRMP scheme — quarterly GSTR-1 & 3B with monthly tax payment. See the GST return due dates page.
- GST registration before first listing
- Correct HSN & GST rate on every SKU
- Tax invoice for each order
- GSTR-1 (outward supplies)
- GSTR-3B (monthly / quarterly)
- Match TCS from platform GSTR-8
- ITC reconciliation via GSTR-2B
- GSTR-9 annual return
- Keep all purchase invoices for ITC
- Reconcile marketplace settlement reports
Don't want to file every month yourself?
See GST Return Filing →GST Rates on Popular Online Products
Your online sale carries the same GST rate as an offline sale — driven by the product's HSN code. The GST 2.0 reform (effective 22 September 2025) collapsed most goods into a two-slab 5% / 18% structure, removing the old 12% and 28% slabs.
| Product category | GST rate | HSN | GST 2.0 note |
|---|---|---|---|
| Apparel & clothing ≤ ₹2,500/piece | 5% | 61 / 62 | Threshold raised from ₹1,000 |
| Apparel & clothing > ₹2,500/piece | 18% | 61 / 62 | Was 12% |
| Footwear ≤ ₹2,500/pair | 5% | 64 | Threshold raised from ₹1,000 |
| Mobile phones / smartphones | 18% | 8517 | Unchanged |
| Laptops / computers | 18% | 8471 | Unchanged |
| Large appliances — TV / AC / fridge | 18% | 84 / 85 | Cut from 28% |
| Beauty & personal care | 18% | 33 | Per current schedule |
| Books (printed) | Nil | 49 | Unchanged |
Rates reflect the GST 2.0 schedule effective 22 September 2025. Always confirm the exact rate for your HSN on the official GST portal before listing, as several categories were reclassified.
Marketplaces auto-suggest a GST rate at listing, but the seller is legally responsible for correct classification. Under-charging GST on a wrong HSN can trigger a demand notice with interest and penalty — verify each SKU against the current GST rate schedule.
Can You Claim ITC as an Online Seller?
Yes. As a regular registered seller you can claim Input Tax Credit on business purchases, provided each invoice carries your GSTIN and appears in your GSTR-2B.
ITC you can claim
- GST on goods bought for resale
- GST on packing & shipping materials
- GST on platform & advertising fees
- GST on software, tools & logistics
ITC you cannot claim
- Purchases from unregistered suppliers
- Personal-use purchases
- Blocked credits under Section 17(5)
- Invoices without your GSTIN
Frequently Asked Questions
Related TaxClue services
Selling on Amazon, Flipkart or Meesho?
Get your GST registration, product-rate classification, monthly returns and TCS reconciliation handled by TaxClue's CA-led team — 100% online, across India.