Selling products on Amazon, Flipkart, Meesho, Myntra or any other e-commerce platform in India comes with specific GST compliance requirements that are different from regular businesses. The government has introduced Tax Collected at Source (TCS) by e-commerce operators, making GST registration mandatory for all online sellers regardless of turnover. Here is the complete guide.
Why E-Commerce Sellers Must Register for GST
Under Section 24(ix) of the CGST Act, any person who supplies goods or services through an e-commerce operator (ECC) — like Amazon or Flipkart — is required to take GST registration regardless of their annual turnover. This means even if your annual sales are ₹5 lakh, if you sell on Amazon or Flipkart, you must have a GSTIN. The normal ₹20 lakh threshold exemption does NOT apply to e-commerce sellers.
Tax Collected at Source (TCS) — Section 52
E-commerce operators (Amazon, Flipkart, Meesho, Swiggy, Zomato, etc.) must collect TCS at 1% of the taxable value of supplies made through their platform on behalf of sellers. The TCS is split as 0.5% CGST TCS + 0.5% SGST TCS (for intra-state) or 1% IGST TCS (for inter-state). The e-commerce operator deposits this with the government and files GSTR-8 by the 10th of each month.
The TCS collected is visible in the seller's GSTR-2B and can be used as a credit against the seller's GST liability. This effectively means the e-commerce platform pre-pays 1% of the seller's GST on their behalf.
Seller's GST Returns
As an e-commerce seller, you must file:
- GSTR-1: Monthly or quarterly, reporting all sales invoices (B2B and B2C) including orders fulfilled through e-commerce platforms
- GSTR-3B: Monthly summary return for payment of GST. Net GST payable = Output GST — ITC — TCS credit
- Annual GSTR-9 (if turnover exceeds ₹2 crore)
HSN Codes for E-Commerce Products
As a GST-registered seller, you must use the correct HSN code for each product category on your invoices. E-commerce platforms often require you to declare HSN codes when listing products. Common product categories:
- Clothing/textiles (Chapter 61-62): 5% or 12% GST depending on value
- Electronics (Chapter 84-85): 18% GST
- Books (Chapter 49): Nil GST
- Home furnishing (Chapter 94): 12% or 18% GST
- Jewellery (Chapter 71): 3% GST
Challenges for Small E-Commerce Sellers
- Monthly GSTR-1 and GSTR-3B filing even for small turnover
- Reconciliation of e-commerce platform settlement statements with GST books
- Managing returns/refunds in GST — credit notes need to match debit entries
- Multiple state supplies require understanding of place of supply rules
Conclusion
GST compliance for e-commerce sellers is non-negotiable — mandatory registration, TCS reconciliation and monthly returns are all part of the obligation. SPOTON provides complete GST services for Amazon, Flipkart, Meesho and other platform sellers in Kerala including registration, monthly returns and annual compliance. Contact us to get your e-commerce GST compliance on track.
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