TCS Under GST for eCommerce Sellers: Rates, GSTR-8 and How to Claim Your Credit

SECTION 01TCS under GST in one paragraph

In brief: TCS under GST is tax that an eCommerce marketplace collects from the payments it passes to sellers, under Section 52 of the CGST Act. The current rate is 0.5% of the net value of taxable supplies. The marketplace deposits it and reports it in GSTR-8, and the seller claims it as a credit in the electronic cash ledger.

TCS stands for tax collected at source. Under GST, it applies when an eCommerce operator, such as a marketplace or quick-commerce platform, sells goods or services supplied by other sellers and collects the customer's payment itself. Before passing the money on, the operator keeps a small percentage, deposits it with the government in the seller's name, and reports it.

For the seller, TCS is not an expense and not a fee. It works like an advance payment of GST: it lands in your electronic cash ledger, where it can pay your GST liability or be refunded. The catch is that it only gets there if the marketplace reports it correctly and you claim it.

Note: Not to be confused with TCS under income tax, which applies to things like foreign remittances and some high-value purchases. This guide covers TCS under GST only.

SECTION 02Who collects TCS, and on which value

In brief: The eCommerce operator collects TCS whenever it collects payment for supplies made by other sellers through its platform. It is calculated on the net value of taxable supplies: the taxable value, excluding GST, of everything sold through the operator in the month, minus the value of supplies returned in that month.

Three points decide what TCS applies to:

• The operator collects the money. TCS applies when the marketplace takes the customer's payment and passes it on to you. Your own website, where your payment gateway collects the money for you, does not attract GST TCS.
• Taxable value, not invoice value. TCS is worked out on the value before GST is added.
• Net of returns, month by month. The base is the month's taxable supplies minus the month's returns. Supplies on which the operator itself pays the GST are left out.

Because the base is calculated per month and per GST registration, a seller registered in several states, for example to store stock in marketplace warehouses, has a separate TCS figure for each GSTIN.

SECTION 03Current TCS rates and the 2024 change

In brief: Since 10 July 2024, the TCS rate under GST is 0.5% of net taxable supplies: 0.25% CGST plus 0.25% SGST or UTGST for supplies within a state, or 0.5% IGST for supplies between states. It was 1% before that date. The CGST Act allows up to 1%; the government notifies the actual rate.

The change came through CBIC Notification No. 15/2024-Central Tax and No. 01/2024-Integrated Tax, after the 53rd GST Council meeting. Some older guides and marketplace help pages still quote 1%; for supplies from 10 July 2024 onward, the rate is 0.5%.

A worked example

On a Rs 1,00,000 net taxable marketplace sale, the operator collects Rs 500 TCS, and it should reach your electronic cash ledger once the operator has filed GSTR-8 and you have accepted the credit.

SECTION 04GSTR-8: the operator's side

In brief: GSTR-8 is the monthly return in which an eCommerce operator reports the TCS it collected, seller by seller and GSTIN by GSTIN. It is due by the 10th of the following month, along with the deposit of the tax. Whatever the operator reports in GSTR-8 is what appears on your GST portal for you to claim.

Every month, each marketplace you sell on files a GSTR-8 listing the sales it handled for you, the returns it netted off and the TCS it collected, against your GSTIN. It also files an annual statement in GSTR-9B. If it gets something wrong, it corrects it through an amendment in a later GSTR-8.

This is why the operator's filing matters so much to you: you cannot claim a rupee of TCS that the operator has not reported, and you should not accept a figure that does not match your own sales.

SECTION 05Claiming TCS credit: the seller's side, step by step

In brief: After the marketplace files GSTR-8, log in to the GST portal, open Services, then Returns, then TDS and TCS credit received. Check each entry against your own records, accept the ones that match, reject the ones that do not, then file the statement. Only then does the accepted TCS move into your electronic cash ledger.

1. Wait for GSTR-8. Entries appear once the operator has filed, usually after the 10th of the following month.
2. Open the credit screen. On the GST portal, go to Services, Returns, then TDS and TCS credit received, and choose the period.
3. Check each entry. Compare the operator's reported sales, returns and TCS with your own records for that marketplace and GSTIN.
4. Accept or reject. Accept the entries that match. Reject the ones that do not; a rejected entry goes back to the operator to correct in a later GSTR-8.
5. File the statement. Submit the TDS and TCS credit received statement. An ARN is generated, and only now is the accepted amount credited to your electronic cash ledger.
6. Use the credit. The balance can pay your GST liability or be claimed as a refund. It is cash, not input tax credit.
7. Watch for amendments. If an operator later amends an entry you accepted, the change appears for you to accept or reject.

The most common gap is the last step that sellers skip: accepting entries but never filing the statement, so the credit never reaches the cash ledger.

SECTION 06Where TCS goes missing

In brief: TCS goes missing when returns fall in a different month from the sale, when sales are spread across several GSTINs, when the marketplace's taxable value differs from your invoice, when the operator files late or wrongly, or when the seller never files the credit statement. Each is a reconciliation problem, not a tax one.

• Returns cross months. A sale in March and its return in April reduce April's net value, not March's. Your monthly figures must follow the same rule or nothing will match.
• Several GSTINs. TCS is reported per GSTIN. If a marketplace maps a sale to the wrong state registration, the credit shows up where you are not looking.
• Value differences. The operator's taxable value can differ from yours where shipping charges, marketplace-funded discounts or cancellations are treated differently.
• Late or wrong filings. If an operator files late or reports the wrong figure, your credit is late or wrong too, until it amends.
• Unclaimed credit. Entries accepted but never filed, or never reviewed at all, leave money sitting outside your cash ledger.

Accepting an entry also confirms the supply values behind it, so reconcile first and accept second.

SECTION 07Reconciling TCS against marketplace payouts

In brief: Reconcile TCS three ways each month: the TCS deducted in each marketplace settlement against 0.5% of your net taxable value, those totals against the GSTR-8 entries on your GST portal, and the accepted credit against your electronic cash ledger. Investigate any gap before the next month's filings move on.

TCS shows up first in your settlement reports, as a deduction from each payout. That is where reconciliation starts:

1. Settlement to sales. For each marketplace and GSTIN, recalculate 0.5% of the month's net taxable value and compare it with the TCS deducted across that month's settlements.
2. Settlements to GSTR-8. Compare the marketplace's total with the entries it reported on your GST portal.
3. GSTR-8 to cash ledger. Confirm that what you accepted, and filed, actually landed in your electronic cash ledger.

TCS is one of several marketplace charges taken as tax that never appear on a rate card, and it sits inside the wider discipline of eCommerce payment reconciliation and the order-to-cash process.

SECTION 08TCS under GST vs TDS under Section 194-O

In brief: Marketplaces deduct two different taxes from seller payouts. TCS under GST is 0.5% of net taxable supplies and becomes a GST cash credit. TDS under income tax is 0.1% of gross sales and becomes a credit against your income tax. Each is filed, reported and claimed through a different system.

SECTION 09Where EasyEcom fits

In brief: TCS reconciliation starts with settlement data that matches your orders. EasyReco, EasyEcom's reconciliation engine, pulls every marketplace settlement, lines up what you should have been paid against what landed, deduction by deduction, and flags the gaps, so TCS that does not match the sales behind it shows up before month end.

EasyReco matches every payout, return and fee across your marketplaces, shows expected, paid and recovered amounts side by side, and files claims for the leakage it finds. Because it works from the same orders and returns that drive your net taxable value, the TCS deducted in each settlement can be checked against the sales it was calculated on. Swiss Military, selling across every major Indian marketplace, reconciles 85% faster on EasyEcom at up to 99.99% accuracy, with invoices and credit notes syncing straight to Tally.

Want to see your own settlements reconciled? Book a demo and we will walk through a month of payouts with you.

Note: This guide explains how TCS under GST works for eCommerce sellers. It is not tax advice; rules and rates change, so confirm how they apply to your business with your chartered accountant.