E-commerce brings special GST rules: marketplace collection of tax at source, multi-state inventory, frequent returns and high transaction volume.
Do online sellers need GST registration?
Special provisions apply to sellers who supply through e-commerce operators, and the rules on threshold relief have changed over time. Do not assume you are exempt: confirm your position against the current law, or let us check it for you.
TCS and marketplaces
E-commerce operators are required to collect tax at source (TCS) on the net value of taxable supplies made through their platforms and report it. The credit appears in your electronic cash ledger and can be used to pay liability, so reconcile it every month.
Place of supply and invoicing
Your tax split depends on the buyer's state: CGST + SGST for intra-state and IGST for inter-state supplies. Multi-warehouse sellers must register in every state where goods are stored.
Returns and reconciliation
Marketplace settlement reports rarely match books exactly because of commissions, fees, TCS and returns. Build a monthly reconciliation from settlement reports to sales, and file GSTR-1 and GSTR-3B from reconciled data.
Returns and refunds
Sales returns need credit notes within the permitted time. Track them separately so output tax is reduced correctly.
Need expert help with this?
Talk to the GstMan team. We will guide you step by step.
General information only; not professional advice. Rates, limits and due dates change. Verify with official sources or consult a professional. Reviewed October 2026. See our editorial policy.
