E-commerce Seller
Tax Compliance Handbook
GST, TCS, ITR, HSN codes — every tax obligation for marketplace and D2C sellers, explained without the jargon.
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- Rules cited on the page
Stop Losing Money to
Tax Confusion
Most e-commerce sellers overpay GST, miss TCS refunds, and file the wrong ITR form. This handbook fixes all three problems.
- GST Registration — Mandatory from Day 1 — Amazon, Flipkart, and Meesho sellers must register for GST regardless of turnover. No threshold exemption for marketplace sellers.
- TDS under Section 194-O and GST TCS — Platforms deduct 0.1% income-tax TDS and collect 0.5% GST TCS on your sales. How to claim it back in your ITR, reconcile with Form 26AS, and avoid double taxation.
- HSN Codes for Common Product Categories — Correct 8-digit HSN codes for clothing, electronics, beauty, home decor, food products — wrong codes trigger GST notices.
- Monthly GST Return Filing Schedule — GSTR-1 (sales) by 11th, GSTR-3B (summary) by 20th — what to report, how to reconcile marketplace data with your books.
- Income from E-commerce in ITR — Which ITR form to use, how to show gross sales vs net sales, commission deductions, return adjustments, and inventory write-offs.
- Inventory Accounting Methods — FIFO vs Weighted Average for different product types, damage/return accounting, Amazon FBA inventory treatment.
- Marketplace vs Own Website — GST compliance differs for D2C brands. Own website: you collect and remit GST. Marketplace: platform is deemed supplier for TCS. Different compliances apply.
- Amazon Global Selling — Export of goods is zero-rated (0% GST). LUT filing to avoid IGST on exports, shipping bill as proof of export, IGST refund mechanism.
TCS — The Money
Platforms Hold Back
Every marketplace deducts TCS (Tax Collected at Source) from your payouts. Most sellers don't know how to claim it back. Here's what each platform deducts:
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Questions people ask
Short answers on E-commerce Tax Guide. Tap a question to open it.
01Is GST registration mandatory for selling on Amazon or Flipkart?
Yes. Any supplier selling goods or services through an e-commerce operator like Amazon or Flipkart must register for GST regardless of turnover. The normal threshold exemption of Rs 40 lakh (goods) or Rs 20 lakh (services) does not apply to e-commerce sellers.
02What is TCS under GST for e-commerce sellers?
E-commerce operators are required to collect Tax Collected at Source (TCS) at 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST; 1% until 9 July 2024) on the net value of taxable supplies made through their platform. This TCS is deposited with the government and can be claimed as credit by the seller in their GST return.
03How is income tax calculated for an e-commerce business?
E-commerce businesses are taxed on their net profit (revenue minus allowable expenses). Businesses with turnover below Rs 3 crore can opt for presumptive taxation under Section 44AD at 8% (6% for digital receipts) of gross receipts, avoiding detailed bookkeeping.
04What HSN codes apply to products sold online?
HSN codes are based on the product category, not the sales channel. All goods sold online must carry the same HSN code as if sold offline. HSN codes must be mentioned on GST invoices — 4-digit codes for turnover between Rs 1.5 crore and Rs 5 crore, and 6-digit codes above Rs 5 crore.
05Do freelancers and service sellers on platforms like Fiverr pay GST?
Yes. Indian freelancers providing services through overseas platforms must register for GST if their turnover exceeds Rs 20 lakh per year. Export of services (payment received in foreign currency from overseas clients) is zero-rated and eligible for GST refund or LUT filing.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.