GST and TCS for new marketplace sellers: the no-jargon guide

You cannot sell on Amazon, Flipkart, Myntra or Ajio without a GST registration. Beyond registration, marketplaces interact with GST in ways that surprise first-time sellers. Here's the plain version. One honest caveat up front: tax rules change — treat this as orientation, confirm specifics with a CA.

GST registration: what you need

A GSTIN in the state you operate from, matching your PAN and bank details exactly. "Exactly" is the operative word — the single most common reason new seller accounts get stuck or suspended is a mismatch between GST records, PAN and the marketplace application. Fix mismatches before you apply, not after.

What is TCS and why is the marketplace taking it?

Marketplaces are legally required to collect Tax Collected at Source on your net sales and deposit it with the government against your GSTIN. It is not a fee — it's your money, parked with the tax department. It appears in your GST portal (GSTR-2B / the TCS section), and you claim it as credit against your GST liability when you file returns.

The catch: credits don't claim themselves. Sellers who don't file properly, or whose accountant doesn't know they sell online, quietly accumulate unclaimed TCS. If you've been selling for a year and have never looked at your TCS ledger, there is very likely money sitting there.

The monthly rhythm

1. Marketplace deducts TCS on your net sales continuously.
2. By mid-month, marketplaces file their statements; your TCS appears in your GST portal.
3. You (or your CA) accept/claim the credit and it offsets the GST you owe on your sales.

Three mistakes that cost real money

• Selling from a different state than your GST registration without adding the required place of business — can invalidate input claims and stall your account.
• Ignoring the GST charged on marketplace fees — that 18% on commissions and shipping is input credit you can claim. On lakhs of fees, it adds up.
• Late or wrong filings — mismatched returns freeze credits and invite notices. Boring, punctual filing is a profit centre.

Our onboarding service sets all of this up correctly on day one — but even if you do it yourself, do it before your first listing, not after your first suspension email.