Divya did 80 orders in her first month — ₹95,000 revenue. She figured GST kicks in at ₹40L turnover, so she had plenty of time. "Wrong" her CA said. "For marketplace sellers, GST is mandatory from rupee 1."
The TCS deducted by Amazon would show in her dashboard but not match anything until she registered.
- GST registration is mandatory from the first sale via e-commerce — no ₹20L/₹40L threshold benefit.
- Marketplace operators deduct 1% TCS (Section 52) on your net taxable supplies and deposit in your GSTIN.
- You file regular monthly GSTR-1 + GSTR-3B. Reconcile TCS via GSTR-2X (auto-populated).
- Composition scheme generally not allowed for marketplace sellers (limited carve-outs).
The no-threshold rule
Under Section 24(ix) of the CGST Act, anyone making "taxable supplies of goods through an e-commerce operator" must register, regardless of turnover. The ₹20L / ₹40L threshold doesn't apply.
This catches:
👉 Amazon / Flipkart / Meesho sellers (goods)
👉 D2C brands using marketplace platforms
👉 Specialty platforms (Nykaa, Ajio, Pepperfry, etc.)
For services sold through e-commerce (Urban Company, Swiggy, Zomato in some cases) — different rules. The platform pays GST on your behalf under Section 9(5). You may not need to register if turnover < ₹20L. Check the specific platform's terms.
TCS — what the marketplace deducts
Order placed on Amazon. Customer pays Amazon ₹1,000 + ₹180 GST = ₹1,180.
On net taxable value (₹1,000) — TCS = ₹10. Deposited in your GSTIN.
Pays you ₹1,170 (₹1,180 − ₹10 TCS) minus platform commission.
Report the sale at ₹1,000 + ₹180 GST. Pay ₹180 net of ITC.
System auto-pulls platform-deducted TCS. Accept/reject in 2X. Credit flows to cash ledger. Use against future tax.
Multi-state nightmare — do I need GST in every state?
Default: you register only in your state of business (where you're based). Even if you sell pan-India, that's inter-state supply → you charge IGST. One GSTIN handles it.
You need additional state GSTINs only if:
👉 You stock in marketplace fulfilment centres (Amazon FBA, Flipkart Smart Fulfilment) across states — that "place of business" triggers GST in that state.
👉 You have a real office / warehouse in another state.
Using Amazon FBA across 5 cities? You technically need GST registration in all 5 states. Most growing sellers underestimate this. Amazon does provide infrastructure to help. Plan early.
The monthly reconciliation
- Pull MTR (Merchant Tax Report) from marketplace
- Match against your sales register
- Cross-check with GSTR-1 you filed
- Verify GSTR-2X TCS credits = TCS shown in marketplace dashboard
- Reconcile returns & refunds — they reduce your taxable value retroactively
Divya's first 60 days
Marketplaces report every rupee to GSTN. There's no hiding. Register before you list — not the month after.
Quick answers
No. Selling on your own website = you're not on an "e-commerce operator". Standard threshold (₹40L goods / ₹20L services) applies. Once you list on Amazon — different game.
Yes. Amazon / Flipkart issue tax invoices for their commission + GST. Treat as input service, claim ITC normally.
Issue credit notes. Reduces your taxable supply in that month. Marketplace MTR will also reflect the reversal — match both.
Operationally yes (faster delivery, Prime badge). Compliance-wise, plan for GST registration in those states. Often worth the overhead at ₹2 cr+ revenue.
Common in first 30 days. Wait one cycle. If still missing, raise dispute with marketplace tax team — they reconcile and refile.
When you might want help
Solo seller, single state, low volume — DIY-able. Where help pays off: multi-state FBA, multi-platform reconciliation (Amazon + Flipkart + Meesho), returns handling at scale, and the inevitable "TCS mismatch" disputes with marketplaces.
Selling online — want GST handled?
Registration → monthly returns → TCS reconciliation → MTR matching. Fixed monthly fee.