What is GST TCS by e-commerce operator (section 52)?
Reviewed by CA Apurav GargLast reviewed
In short
GST TCS is tax an e-commerce operator holds back from sellers' payouts on the net value of taxable sales made through it, and pays to the government. The seller can use it as a credit against GST due.
What it is
Under section 52 of the CGST Act, an e-commerce operator that collects payment for supplies made by other sellers through its platform must collect tax at source (TCS) from those sellers. It is worked out on the net value of taxable supplies made through the operator in the month, and the rate is notified by the government. The rate was reduced from 10 July 2024.
TCS is not an extra tax. It is an advance payment of the seller's own GST, collected by the marketplace and credited to the seller.
What it is charged on
- Taxable supplies made through the operator by other sellers, minus the returns of such supplies in the same month.
- Excluding GST itself.
- Not on exempt or nil-rated supplies, and not on services where the operator itself pays the tax under section 9(5).
It is worked out separately for each of the seller's GSTINs, because each state's sales are reported under that state's registration.
How the seller gets the credit
- The operator deposits the TCS and files GSTR-8 every month by the due date, listing each seller's GSTIN, sales, returns and TCS.
- The seller sees the figures on the GST portal and accepts them, or rejects them if they are wrong.
- Accepted TCS is credited to the seller's electronic cash ledger and can be used to pay GST, interest and other amounts.
If you reject an amount, the operator has to correct its GSTR-8, so raise the problem with the marketplace first.
Registration
A seller supplying goods through an operator that collects TCS generally has to register for GST regardless of turnover, with some exemptions notified for small sellers. Check the current exemptions before selling through a marketplace without a GSTIN.
Reconcile it every month
Match three figures for each GSTIN:
- Your sales and returns through each marketplace, from your books and its tax reports.
- The net value and TCS the operator reported in GSTR-8.
- The TCS withheld in your settlement reports.
Differences usually come from returns counted in a different month, sales reported under the wrong GSTIN, or sales the marketplace has not reported. A gap between the marketplace's figures and your GSTR-1 can also lead to questions from the department.
Example in rupees
A seller's sales through one marketplace, in one state, for a month. All amounts exclude GST:
| Line | Amount |
|---|---|
| Taxable sales through the marketplace | ₹12,00,000 |
| Returns of earlier and current sales, in the same month | −₹1,50,000 |
| Net value of taxable supplies | ₹10,50,000 |
| TCS collected | ₹10,50,000 × the rate in force |
The marketplace deducts the TCS from the seller's payouts, deposits it by the due date and reports it in its GSTR-8. The seller then sees it on the GST portal, accepts it, and it is credited to the seller's electronic cash ledger, where it can pay GST.
If returns in a month are higher than sales, the net value is negative. No TCS is collected that month, and the negative amount is not carried to the next month. The figures are illustrative. Use the TCS & TDS Credit Calculator for the current rate.
Legal reference: CGST Act, 2017: section 52; Notification 15/2024-Central Tax (rate from 10 July 2024) and the matching Integrated and Union Territory Tax notifications
Related terms
Work it out for your business
Want help applying this to your own accounts?
We handle bookkeeping, reconciliation, GST and TDS for D2C and marketplace sellers, and can walk you through how this works in your business.
General information only, not professional advice. Rules and rates change — check the official source before you act.