E-commerce under GST involves three parties: the operator (Amazon, Flipkart), the seller, and the buyer. TCS at 1%, mandatory registration, and Section 9(5) liability make e-commerce GST complex. This guide covers all obligations for marketplace sellers and operators.
1% total (0.5% CGST + 0.5% SGST for intra-state, or 1% IGST for inter-state). Applied on net value of taxable supplies.
Aggregate value of taxable supplies made through ECO during the month, MINUS returns/cancellations during the same month. Exempt and non-taxable supplies are excluded.
ECO must deposit TCS within 10 days of end of month. Filed via GSTR-8 return.
TCS appears in seller's electronic cash ledger. Can be used for payment of any GST liability (output tax). If excess: claim refund after filing annual return. Reflected in seller's GSTR-2A.
Details of all supplies made through ECO (supplier-wise, GSTIN-wise). TCS collected and deposited. Interest on delayed deposit. ECO must reconcile with seller records.
| Service | Example | ECO Liability |
|---|---|---|
| Transportation of passengers (ride-hailing) | Uber, Ola, Rapido | ECO pays GST on behalf of driver-partners. Drivers below ₹20L threshold: ECO bears full GST liability. |
| Accommodation services | OYO, MakeMyTrip (hotel aggregators) | ECO pays GST on behalf of hotel if hotel is unregistered. Registered hotels: pay their own GST. |
| Restaurant services (from Jan 2022) | Swiggy, Zomato food delivery | ECO collects and pays 5% GST on food delivery orders. Restaurant issues invoice but ECO is the tax payer. Restaurant can claim ITC. |
| Housekeeping services | Urban Company | ECO pays GST if service provider is unregistered. Registered providers: pay their own GST. |
Yes, mandatory. Section 24(x) of the CGST Act requires compulsory registration for anyone supplying goods/services through an e-commerce operator, regardless of turnover. Even if your annual turnover is ₹5 lakh (below normal ₹40 lakh threshold), you MUST register for GST to sell on Amazon, Flipkart, Meesho, or any marketplace. Exception: sellers of goods notified under Section 10(2A) may be exempt — but this currently has limited applicability.
Tax Collected at Source (TCS) is collected by the e-commerce operator (Amazon, Flipkart, etc.) at 1% of net taxable value of all supplies made through the platform. This is deducted from your settlement and deposited with the government. The TCS appears in your electronic cash ledger (visible in GST portal) and can be used to pay your GST liability. If TCS exceeds your liability: you can claim refund after filing annual return.
No. Section 10(2)(d) explicitly bars composition dealers from supplying goods/services through e-commerce operators. If you opt for composition scheme, you cannot sell on Amazon, Flipkart, Swiggy, Zomato, or any e-commerce marketplace. You can only sell through your own physical store or your own website (direct D2C e-commerce is debated — currently most states don't allow composition for D2C either).
From January 1, 2022: the e-commerce operator (Swiggy/Zomato) is required to collect and pay 5% GST on food delivery orders under Section 9(5). The restaurant still issues the invoice, but the tax liability shifts to the ECO. The restaurant can claim ITC on its input purchases. This change was made to bring unregistered cloud kitchens and small restaurants into the tax net — since the ECO now bears the tax compliance burden.
When a seller in State A sells through an e-commerce platform to a buyer in State B: (1) IGST applies (not CGST+SGST), (2) TCS is collected at 1% IGST (instead of 0.5%+0.5%), (3) Seller must have GST registration in State A, (4) E-way bill required if goods value > ₹50,000. Important: composition dealers cannot make inter-state supplies — so they are doubly excluded from marketplace e-commerce.
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