GST for E-commerce Sellers: Section 9(5), TCS and Invoicing (2026)

Selling through marketplaces like Amazon and Flipkart, or apps like Swiggy and Zomato, changes your GST life in three ways: registration becomes compulsory for goods sellers, certain supplies shift the tax burden to the operator, and every payout carries tax collected at source. This guide explains each piece and how to reconcile your payouts without losing money, as the rules stand in 2026.

Compulsory Registration for Goods Sellers on ECOs

A person supplying goods through an e-commerce operator must register for GST regardless of turnover. The ₹40 lakh threshold exemption for goods suppliers is simply not available where sales run through an ECO, so a small craftseller with ₹5 lakh of Amazon revenue needs registration from the first rupee. Suppliers of services through e-commerce platforms follow the normal service threshold of ₹20 lakh, except where section 9(5) makes the operator liable for the tax, as described below.

Section 9(5): When the Operator Pays Your GST

For certain supplies, the e-commerce operator is deemed to be the supplier and pays the GST itself. The seller cannot charge tax separately and must invoice the customer with a price that already includes the tax. The main section 9(5) categories are:

If you fall in one of these buckets, your job is to issue a price-inclusive invoice without a GST line and to report the supplies in GSTR-1 under the section 9(5) table, quoting the operator’s GSTIN. Never add your own GST on top — doing so creates a double-taxation claim the system will not let you keep, and the buyer ends up paying twice for the same meal or ride.

TCS Under Section 52: The 0.5% Deduction

Every e-commerce operator collects tax collected at source (TCS) of 0.5% on the net value of taxable supplies made through it — 0.25% under CGST and 0.25% under SGST, or 0.5% under IGST for inter-state supplies. The operator deposits it through GSTR-8 by the 10th of the following month, and the amount lands in your electronic cash ledger as TCS credit. That credit is real money: use it to pay output tax or claim it as a refund, because TCS left unclaimed is the most common silent leak in marketplace accounting.

Operators also file an annual settlement statement reconciling the TCS collected through the year, so the year-end cross-check has an official document to compare against your books.

Reconciling Amazon and Flipkart Payouts

Marketplace settlement reports bundle several line items — gross sales, the section 9(5) portion, refunds, commission and platform fees, shipping charges and TCS. A monthly reconciliation keeps each in its place:

• Match gross taxable sales in the settlement report against your GSTR-1 figures for the month.
• Confirm that 9(5) supplies are reported in the operator’s GSTIN column and carry no GST of your own.
• Verify the TCS deducted per the report equals the TCS credit appearing in your cash ledger.
• Treat commission and fees as purchases with ITC, backed by operator tax invoices.

Where the TCS in your ledger disagrees with the settlement report, raise the discrepancy with the operator early, because corrections flow only through the operator’s GSTR-8 amendments.

Invoicing and E-Invoicing Basics

For supplies outside section 9(5), you invoice normally — B2B invoices with GSTIN, B2C invoices to end customers — and e-invoicing applies once your AATO crosses the ₹5 crore threshold. E-way bills follow the general rules for dispatches of goods. Verify the operator’s GSTIN quoted on documents with our GSTIN verification tool, and estimate margins after tax using the GST calculator before listing new products.

Common Mistakes to Avoid

• Assuming registration is optional below the normal turnover threshold — for goods on ECOs it never is.
• Charging GST on section 9(5) supplies, which creates an irrecoverable double claim.
• Forgetting to claim TCS credit from the cash ledger, effectively donating 0.5% of sales.
• Booking TCS as a commission expense instead of a credit, which distorts both GST and income-tax books.
• Filing GSTR-1 late, which delays buyer credit and invites notices on mismatches.

Sellers juggling multiple marketplaces usually formalise this with a GST consultant once monthly reconciliation starts taking more than an hour.

Key Takeaways

• Registration is compulsory for anyone supplying goods through an e-commerce operator, whatever the turnover.
• For 9(5) supplies — restaurant food, passenger transport, housekeeping, accommodation and apparel rental — the operator pays GST and your invoice is price-inclusive.
• TCS is 0.5% (0.25% + 0.25%, or 0.5% IGST) under section 52, deposited via GSTR-8 and credited to your cash ledger.
• Reconcile settlement reports against GSTR-1, your books and the operator’s annual statement every month.

Frequently Asked Questions

Do I need GST registration if my Amazon sales are below ₹40 lakh?

Yes. Suppliers of goods through e-commerce operators must register mandatorily under section 24, and the threshold exemption does not apply to such supplies. Service suppliers follow the normal ₹20 lakh threshold.

What are section 9(5) supplies in simple terms?

They are supplies where the law treats the platform, not you, as the seller for GST purposes — restaurant food delivery, passenger transport, housekeeping, accommodation and apparel rental. The operator charges and pays the GST within the customer’s price.

How do I recover the TCS deducted by Flipkart or Amazon?

The TCS appears in your electronic cash ledger after the operator files GSTR-8. You can set it off against output tax or claim a refund, after reconciling it with the amounts shown in your settlement reports.

Should I charge GST on food sold through a delivery app?

No, if the app is the registered operator for that supply. Issue a price-inclusive invoice without a GST line and report the sale under section 9(5) in GSTR-1 with the operator’s GSTIN.

Does e-invoicing apply to marketplace sellers?

It applies by turnover, not by channel: once your aggregate turnover crosses ₹5 crore, e-invoicing applies to your B2B supplies regardless of whether they originate on a marketplace.

Disclaimer: Tax laws change frequently. Verify current rates and deadlines on the official portals (incometax.gov.in, gst.gov.in) or consult a qualified professional before acting.