Tag: Section 52

Selling on marketplaces opens up a national market almost overnight, but it also brings a distinct set of GST rules. GST for e-commerce sellers covers when you must register, how the marketplace collects tax at source (TCS) under section 52 of the CGST Act, and how to reconcile your returns with the data that the platform reports about you.

This guide explains each of these in plain terms and offers a monthly routine that keeps your GSTR-1, GSTR-3B and TCS credits in agreement.

Key takeaways

• Sellers supplying through an e-commerce operator that collects TCS are generally required to register compulsorily, but there are notified exemptions for small service providers and, since 1 October 2023, for small intra-State goods sellers meeting conditions.
• The operator collects TCS at 0.5% of the net value of taxable supplies (0.25% CGST + 0.25% SGST, or 0.5% IGST), a rate in force since 10 July 2024.
• The operator files GSTR-8 by the 10th of the following month; the seller’s TCS then appears on the portal and, once accepted, credits the electronic cash ledger.
• For notified services such as restaurant delivery and cab rides, the operator itself pays GST under section 9(5), and no TCS applies on those supplies.
• Monthly reconciliation of orders, returns, settlements and GSTR-8 data is the single best protection against mismatch notices.

Registration: who needs it

Under section 24 of the CGST Act, a person supplying goods or services through an e-commerce operator required to collect tax at source must register, regardless of turnover. Over time, the government has relaxed this for smaller sellers:

• Service providers selling through an operator are exempt from registration if their aggregate turnover stays within the normal threshold (₹20 lakh, or ₹10 lakh in special category States).
• Goods sellers with turnover within the threshold can sell through operators without registration since 1 October 2023, but only for intra-State supplies and subject to conditions such as having a PAN and declaring the State of supply on the platform.
• Composition taxpayers can supply goods through operators within their State, subject to the platform’s enrolment process, but services through TCS-collecting platforms remain restricted.

If you plan to sell across States, you will generally need GST registration from the outset.

How TCS under section 52 works

Every operator that collects consideration on behalf of sellers must collect TCS on the net value of taxable supplies made through it in a month.

Element	Detail
Who collects	The e-commerce operator
Rate	0.5% (0.25% CGST + 0.25% SGST for intra-State; 0.5% IGST for inter-State)
Base	Taxable supplies made through the operator, less supplies returned in the month, excluding GST and section 9(5) supplies
Deposit and return	By the 10th of the following month, in Form GSTR-8
Seller’s credit	Shown on the portal; accepted credit goes to the electronic cash ledger

A simple example

In a month, a seller makes taxable sales of ₹10,00,000 (excluding GST) through a marketplace, and customers return goods worth ₹1,00,000. Net value is ₹9,00,000. TCS at 0.5% is ₹4,500. The operator deducts this from the seller’s settlement and reports it in GSTR-8. The seller accepts the TCS entry on the portal and uses it from the cash ledger to pay GST in GSTR-3B, or claims a refund of any excess.

Section 9(5) services

For restaurant services delivered through apps, passenger transport through ride-hailing apps, certain accommodation services and some other notified services, the operator is treated as the supplier and pays GST itself. After GST 2.0 (effective 22 September 2025), check the current rates and notified list, including for local delivery services, since the rate structure moved to 5%, 18% and 40%.

Reconciliation: where most problems start

The operator’s GSTR-8 tells the tax department, month by month, how much you sold through that platform. If your GSTR-1 shows a different figure, you may receive a notice. A clean monthly reconciliation should compare:

1. Order report from the seller panel (gross sales, cancellations, returns).
2. Invoices issued by you or on your behalf through the platform’s tax invoice feature.
3. GSTR-1: B2C supplies reported with the operator’s GSTIN in the relevant table, and B2B invoices where the buyer gave a GSTIN.
4. GSTR-8 data shown in your TCS credit section.
5. Settlement reports: payouts after commission, shipping fees, TCS and TDS.

Differences usually come from returns in a later month, cancelled orders, timing of invoices near month-end, or wrong State or GSTIN mapping in multi-warehouse setups. Fix them in the next return and keep a reconciliation working file for every month.

Remember also that the platform’s commission and fees are services to you, with GST charged by the operator. That GST is eligible input tax credit if it appears in your GSTR-2B, so include it in your GSTR-2B vs GSTR-3B reconciliation.

Multi-State warehouses and income-tax TDS

Marketplaces that store your stock in fulfilment centres in other States create a place-of-business issue: each State where your goods are stored generally requires registration or an additional place of business. Plan your registrations before enabling multi-State fulfilment.

Separately from GST TCS, the operator also deducts income-tax TDS on the gross amount of sales (the provision earlier known as section 194-O, now in section 393 of the Income-tax Act 2025). Track both, as they appear in different places: GST TCS on the GST portal, and income-tax TDS in your annual tax credit statement.

Monthly checklist for online sellers

• Download order, return and settlement reports from every platform by the 3rd.
• Reconcile sales with invoices and prepare GSTR-1 data platform-wise.
• Accept or query TCS entries on the portal after GSTR-8 is filed.
• Review input tax credit on platform fees in GSTR-2B.
• File GSTR-3B using TCS credit in the cash ledger where helpful.
• Keep month-wise reconciliation working papers for audits and notices; our guide on GSTR-1 vs GSTR-3B mismatch notices explains why this matters.

Frequently asked questions

Do I need GST registration to sell on a marketplace?

Generally yes, unless you fall within a notified exemption, such as a small service provider within the threshold, or a small goods seller making only intra-State supplies and meeting the prescribed conditions.

What is the current TCS rate under section 52?

0.5% of the net value of taxable supplies, split as 0.25% CGST and 0.25% SGST, or 0.5% IGST for inter-State supplies, effective from 10 July 2024.

How do I use the TCS collected by the marketplace?

Once the operator files GSTR-8, accept the TCS entries on the GST portal. The amount is credited to your electronic cash ledger and can be used to pay GST or claimed as a refund.

Is TCS charged on returned goods?

TCS is charged on the net value, so goods returned during the month reduce the base on which TCS is collected.

This article is general information based on the law as of September 2026, and is not legal or tax advice. Please check the facts of your own case with a professional before acting.