If you sell through an Indian marketplace like Amazon or Flipkart, GST registration is generally mandatory from your first sale. If you sell only through your own store, you must register once turnover crosses ₹40 lakh for goods (₹20 lakh for services) or you sell across state lines. On every sale you charge GST to the buyer, and marketplaces additionally collect a small TCS amount you can reclaim. Here’s how it all fits together.
Do you need GST to sell online?
It depends on how you sell:
- Selling on marketplaces (Amazon, Flipkart, etc.): GST registration is generally required regardless of turnover, because you’re supplying through an e-commerce operator.
- Selling on your own store: the normal thresholds apply — ₹40 lakh turnover for goods, ₹20 lakh for services — and any interstate sale makes registration mandatory immediately.
Recent notifications give limited relief to very small sellers making only intra-state supplies through e-commerce operators, but most growing online businesses will need to register. Registering also lets you claim input tax credit on your costs, which often outweighs the compliance effort.
What is TCS under GST?
TCS (Tax Collected at Source) is an amount the e-commerce operator deducts from your sale proceeds and deposits with the government on your behalf.
- The rate is currently 0.5% of the net value of taxable supplies (reduced from 1% in 2024).
- It is not an extra tax — it’s a prepayment. You claim it back against your own GST liability when you file returns.
- The marketplace reports TCS in your GST portal, so you can reconcile it each month.
This is why your marketplace payout is slightly lower than the order value: a small slice is held as TCS until you reclaim it.
Who pays GST — you or the marketplace?
You do. The seller is liable for the GST charged on each sale. The marketplace only:
- Collects TCS from your proceeds, and
- Reports those collections to the government.
It does not file your returns or pay your GST. You charge GST to the buyer, collect it as part of the price, and remit it through your own filings.
GST rate slabs for common products
GST rates are tied to a product’s HSN code and fall into standard slabs:
| Slab | Examples (illustrative) |
|---|---|
| 0% | Fresh produce, some unbranded staples |
| 5% | Many packaged foods, small apparel items |
| 12% | Apparel above certain price points, processed foods |
| 18% | Most electronics, cosmetics, services |
| 28% | Luxury and “sin” goods |
Always confirm the exact HSN code and rate for your specific product — getting the HSN right is what keeps your invoices compliant.
How GST works on your own D2C store vs a marketplace
- Your own store: you charge GST at checkout, issue a GST-compliant invoice, and file returns. There’s no TCS because there’s no operator in between.
- Marketplace: you charge GST as usual, but the operator also deducts TCS from your payout, which you later reclaim.
A platform that generates GST-compliant invoices automatically removes most of the manual work here — see our billing and invoicing guide.
Filing returns and claiming input tax credit
- File GSTR-1 (your outward sales) and GSTR-3B (summary return with tax payment) on a monthly or quarterly cycle.
- Claim input tax credit on GST you paid for business inputs — raw materials, packaging, software, logistics — to reduce your net liability.
- Reconcile marketplace TCS so you don’t lose track of money owed back to you.
How QuicShop helps
QuicShop is built for Indian commerce, so GST is native, not an add-on. Invoices are generated automatically with the right GSTIN, HSN codes and tax breakup, so your books stay clean as you scale — without buying a separate GST plugin. If you’re just getting started, see how to GST-enable your business.
This guide is general information, not tax advice. Rules and rates change — confirm current requirements with a tax professional or the GST portal.
Frequently asked
Do I need GST to sell online in India?
If you sell through marketplaces like Amazon or Flipkart, GST registration is generally required. If you sell only through your own store, it becomes mandatory once turnover crosses ₹40 lakh for goods (₹20 lakh for services) or you make interstate sales. Recent rules give limited relief to very small intra-state sellers.
What is TCS under GST for e-commerce?
Tax Collected at Source (TCS) is a small percentage that e-commerce operators deduct from your sale proceeds and deposit with the government — currently 0.5% of net taxable supplies (reduced from 1% in 2024). You can claim this amount back against your GST liability when you file returns.
Who pays GST — the seller or the marketplace?
The seller is liable for GST on the sale. The marketplace only collects TCS on your behalf and reports it; it does not pay your GST for you. You still charge GST to the buyer and file your own returns.
What GST rate applies to my products?
Rates depend on the product's HSN code and fall into slabs of 0%, 5%, 12%, 18% or 28%. For example, many packaged foods are 5%, while most apparel and electronics fall around 12–18%. Always confirm the correct HSN code for your product.
Which GST returns do online sellers file?
Most sellers file GSTR-1 (outward sales) and GSTR-3B (summary and tax payment), monthly or quarterly depending on turnover and scheme. Marketplace TCS is reflected in your portal so you can reconcile and claim it.