A Practical Guide for Sellers

Selling products online through platforms like Amazon, Flipkart, and Meesho has become extremely common now a days. From small traders to home-based sellers and startups, everyone wants to enter e-commerce. But the moment you sell through these platforms, GST rules change significantly.

As a Consultant, I’ve seen many sellers who faced notices and penalties simply because they were unaware of special GST provisions for e-commerce. Here i ll explain the topic clearly and practically, without legal jargon and much involvement of technicalities.

What is E-Commerce under GST?

Under GST, e-commerce means:

Selling goods or services online through a digital platform that collects payment or facilitates sales.

Examples: Amazon, Flipkart, Meesho, Myntra, Ajio

These platforms are legally called E-Commerce Operators (ECOs).

Mandatory GST Registration – Very Important Point 🚨

Normal GST Rule:

GST registration is required only after crossing turnover limit.

❗ E-Commerce Rule:

👉 If you sell through Amazon, Flipkart, or Meesho, GST registration is compulsory from Day 1.

Even if:

• Turnover is ₹10,000
• You are a small seller
• You sell from home

📌 Exception: Very limited services notified by government (rare for product sellers)

Difference Between Seller & E-Commerce Operator

Role	Who
Seller	You (product owner)
E-Commerce Operator	Amazon / Flipkart / Meesho
GST Liability	Mainly seller
TCS Deduction	By platform

What is TCS under GST?

TCS = Tax Collected at Source

E-commerce platforms are required to:

• Collect 1% GST (0.5% CGST + 0.5% SGST)
• On the net value of sales
• And deposit it to the government

📌 This is not extra tax, but a temporary deduction

TCS Explained Simply

• Sale value on Amazon: ₹1,00,000
• Amazon deducts TCS @1% = ₹1,000
• You receive ₹99,000 (before commission)

This ₹1,000:

• Appears in your GST portal
• Can be claimed as credit in cash ledger and you need to file separate return to add in your ledger after due verification on monthly basis.
• Adjusted against your GST liability

GST Returns Applicable to E-Commerce Sellers

🔹 Regular GST Returns:

• GSTR-1 – Sales details
• GSTR-3B – Tax payment

🔹 Additional Return:

• GSTR-2B – Check TCS credit
• GSTR-8 – Filed by Amazon / Flipkart (not by seller)

⚠️ Many sellers forget to match TCS credit → leads to mismatch notices

GST on Commission Charged by Platforms

Amazon / Flipkart / Meesho charge:

• Commission
• Logistics fees
• Packaging fees
• Advertisement charges

These charges include GST, which:

• Seller can claim as Input Tax Credit (ITC)
• If properly reflected in GSTR-2B so match it and claim well in advance.

📌 Missing invoices = loss of ITC

GST Rates on Products Sold Online

Important clarification:
👉 GST rate is based on product, not platform

Selling on Amazon does NOT increase GST rate.

Example:

• Mobile accessories → 18%
• Clothing below ₹1,000 → 5%
• Electronics → 18%

Common Mistakes Made by Online Sellers

As a consultant, these are the most frequent errors I see:

• Selling without GST registration
• Ignoring TCS reconciliation
• Wrong GST rate selection
• Not claiming ITC on platform fees
• Mismatch between sales & GST returns
• Assuming platform handles GST (they don’t)

GST Notices to E-Commerce Sellers – Why They Come

Common reasons:

• Difference between sales shown by Amazon and GSTR-1
• TCS credit not matched
• Non-filing of returns
• Excess ITC claim
• Selling without registration

Most notices are avoidable with basic compliance.

GST on Meesho – Special Mention

Many sellers believe Meesho is different.
NO, It is NOT.

GST rules for Meesho sellers are:

• Same mandatory registration
• Same TCS provisions
• Same return compliance

Only the business model differs, not GST law.

Must consider if you are beginner

E-commerce is a great opportunity, but GST compliance is non-negotiable. Most problems arise not due to high tax, but due to lack of awareness.

If managed properly:

• GST is neutral
• ITC flows smoothly
• Business scales without fear

Understand GST first, then sell fearlessly and still if you have any query ; feel free to refer our web portal FAQ and you may write us along with detail at info@thecadesk.