Navigating GST for E-Commerce Sellers in India: 2025 Guide

Introduction

The e-commerce landscape in India is booming, and platforms like Amazon, Flipkart, Meesho, and Shopify have opened doors for lakhs of small sellers. However, with growth comes the obligation to comply with Goods and Services Tax (GST) laws.

This blog post by Makwana Sweta & Associates, trusted Tax Consultants in Mumbai, will help you understand GST for e-commerce sellers in India, including registration, TCS, returns, and more—updated with all 2025 provisions.

Is GST Registration Mandatory for E-Commerce Sellers?

Yes. As per Section 24(ix) of the CGST Act, GST registration is mandatory for anyone selling through e-commerce platforms—irrespective of turnover.

Even if your total turnover is below the threshold of ₹40 lakhs (₹20 lakhs for services), you must register for GST if you sell via online platforms.

No exemption limit applies in such cases.

Types of GST Applicable

E-commerce sellers are typically subject to:

CGST + SGST (intra-state supplies)
IGST (inter-state supplies)

Example:
If you’re based in Maharashtra and sell to Delhi through Amazon, IGST applies.

What is TCS in E-Commerce?

TCS (Tax Collected at Source) is collected by the e-commerce operator from the seller at the rate of:

1% (0.5% CGST + 0.5% SGST) for intra-state sales
1% IGST for inter-state sales

This TCS is deducted from your payments by the platform and deposited with the government under your GSTIN.

TCS credit can be claimed while filing your GSTR-3B.

Which GST Returns Should E-Commerce Sellers File?

As an e-commerce seller, you need to file:

Return Type	Frequency	Purpose
GSTR-1	Monthly/Quarterly	Details of outward supplies (sales)
GSTR-3B	Monthly	Summary return + tax payment
GSTR-9	Annually	Annual GST return (if turnover > ₹2 crore)

E-commerce operators (like Amazon) also file GSTR-8 to report TCS collected from you.

Invoicing Guidelines for Online Sellers

Invoice must be GST-compliant – mention GSTIN, HSN code, SAC code, tax breakup.
Issue invoice at the time of dispatch, not order confirmation.
For B2C supplies, maintain serially numbered invoices.
Use e-invoicing if your turnover exceeds ₹5 crore (FY 2024-25 rule).
Upload invoices promptly in the portal to match GSTR-1.

Common Mistakes E-Commerce Sellers Should Avoid

Ignoring GST registration because of low turnover.
Not claiming TCS credit in GSTR-3B.
Delay in reconciling invoices with GSTR-2B.
Not reporting interstate sales correctly.
Failing to reconcile platform settlement data.

Tips for Hassle-Free GST Compliance

Reconcile marketplace sales reports (Amazon, Flipkart) with GSTR-2B monthly.
File GSTR-1 and 3B on time to avoid late fees and interest.
Maintain a digital record of invoices, TCS statements, and returns.
Work with a Chartered Accountant in Mumbai like CA Sweta Makwana to stay compliant and focused on growth.

Example Scenario

Suppose you’re a seller from Delhi supplying kitchenware through Flipkart. You made ₹3 lakh in sales this month:

Flipkart deducts 1% TCS = ₹3,000
You report the ₹3 lakh in GSTR-1 as outward supplies
You claim ₹3,000 TCS in GSTR-3B
You pay the net GST after adjusting input tax and TCS

What if I Sell on My Own Website?

If you sell through your own portal (e.g., via Shopify), you still need GST registration. But TCS does not apply unless your platform is considered an e-commerce operator under the GST law.

Use a payment gateway like Razorpay or Paytm? Confirm if they act as e-commerce operators. If yes, TCS may be applicable.

Recent 2025 GST Updates for E-Commerce

E-invoicing mandatory for sellers above ₹5 crore turnover (previously ₹10 crore).
Auto-reconciliation tools in GSTN are now better integrated with platforms.
Penalties increased for non-filing GSTR-1 on time—₹200/day.
QR code on B2C invoices mandatory for businesses over ₹5 crore.

GST Notices & Non-Compliance Risks

Delays in filing can lead to late fees, interest @18% p.a., or suspension.
Wrong TCS reconciliation may trigger GST audit or notices.
Input Tax Credit (ITC) claimed without GSTR-2B matching = liable to penalty.

Final Thoughts

For e-commerce sellers in India, GST compliance isn’t optional—it’s a must. With so many sales channels and tax rules, staying updated and accurate is key to avoiding penalties and maximizing your margins.

At Makwana Sweta & Associates, we offer CA services in Mumbai and PAN India to help online sellers streamline their tax compliance.

Need help managing your GST? Get in touch with our expert team of Chartered Accountants in Mumbai today.

Outbound: GST Portal for E-commerce Sellers
Inbound: GST Services by CA Sweta Makwana