Updated for the Income-tax Act, 2025 and GST 2.0 ratesUpdated for IT Act 2025 & GST 2.0 Due datesGlossaryTDS rates
AiHisab Knowledge By Atulya Intelligence
Industry Accounting

E-commerce sellers: marketplace settlements, GST TCS and income tax TDS

2 min read Updated 03 Oct 2026 3 views
AI summary

How to account for marketplace payouts, the 0.5% GST TCS, the 0.1% income tax TDS, commissions and returns.

9 sections

Key facts

  • A marketplace (e-commerce operator) collects money from the buyer, deducts its fees and taxes, and pays you the balance. You must record the full sale, not just the payout.
  • GST TCS (section 52): the operator collects 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) of your net taxable sales and shows it in GSTR-8. It appears in your electronic cash ledger, which you can use to pay GST.
  • Income tax TDS: the operator deducts 0.1% of gross sales (old section 194-O, now in section 393 of the Income-tax Act, 2025). For an individual or HUF seller, no TDS if sales are up to ₹5 lakh a year and PAN/Aadhaar is given.
  • Marketplace commission, fulfilment and shipping fees come with GST invoices from the operator. Claim ITC on them.

GST registration

  • Sellers of goods on a marketplace generally need GST registration. Since October 2023, small sellers making only intra-state supplies below the threshold, and composition dealers, may sell through operators under specified conditions.
  • Sellers of most services through a marketplace can stay unregistered below ₹20 lakh. For some services (cab, hotel stays, restaurant food) the operator itself pays GST under section 9(5).

Recording one settlement

Sale of ₹11,800 including 18% GST (₹10,000 + ₹1,800). Commission and fees ₹1,000 + GST ₹180. TCS ₹50. TDS ₹10. Payout ₹10,560.

EntryDebit ₹Credit ₹
Marketplace (customer) A/c Dr11,800
To Sales A/c10,000
To Output GST1,800
Marketplace Fees A/c Dr1,000
Input GST Dr180
GST TCS Receivable A/c Dr50
TDS Receivable A/c Dr10
Bank A/c Dr10,560
To Marketplace A/c11,800

Returns and cancellations

  • For a customer return, issue a credit note and reduce output GST. The operator reverses its TCS in GSTR-8.
  • Reconcile every settlement report with your sales register monthly. Unmatched orders are usually returns, chargebacks or penalties.

Common questions

How do I claim the GST TCS?

Accept the TCS entries shown on the GST portal (they come from the operator's GSTR-8). The amount is then credited to your electronic cash ledger.

Where do I claim the 0.1% TDS?

In your income tax return. Check that it appears in Form 168 (old 26AS) against your PAN.

Do I report sales by the operator's GSTIN in GSTR-1?

Yes. GSTR-1 has a separate table for supplies made through e-commerce operators, with the operator's GSTIN.

Sources

Law as of October 2026. Verify against the latest notifications before relying on it for filings.
Was this guide helpful?