TCS Under GST — The Complete Guide for Online Sellers
- TCS is 0.5% (0.25% CGST + 0.25% SGST intra-state, 0.5% IGST inter-state) — reduced from 1% on 10 July 2024.
- It is charged on the net taxable value (sales minus returns), before marketplace commission.
- TCS is not a cost. It is your own tax paid early, and it lands in your electronic cash ledger.
- You have to accept the credit on the portal — this is the step most sellers miss, and unclaimed TCS accumulates silently.
- All marketplaces feed the same cash ledger. Accumulated balance can be refunded.
On this page
Every marketplace you sell on holds back a slice of your money and pays it to the government under your GSTIN. That is TCS. The single most important thing to understand about it is that it is not a cost — it is your own tax, paid early, sitting in a ledger waiting for you to use it. Sellers who do not know that are effectively donating money to the government every month.
The rate: 0.5%, not 1%
Section 52 of the CGST Act requires every eCommerce operator to collect tax at source on the net value of taxable supplies made through its platform. The rate was reduced from 1% to 0.5% by Notification 15/2024-Central Tax, effective 10 July 2024.
| Type of supply | TCS breakdown | Total |
|---|---|---|
| Intra-state (buyer in your state) | 0.25% CGST + 0.25% SGST | 0.5% |
| Inter-state (buyer in another state) | 0.5% IGST | 0.5% |
What "net value" means
TCS is charged on the net value of taxable supplies — total supplies made through the platform in the month, minus supplies returned in that month. It is not charged on the gross figure.
Two consequences worth knowing:
- TCS is calculated on the taxable value, not on the GST-inclusive amount and not on the amount you finally receive after commission.
- Marketplace commission and fees are not deducted before computing TCS. The platform charges you commission separately; TCS sits on the supply value.
A worked example
You sell ₹1,00,000 of taxable goods through a marketplace in a month, and ₹15,000 comes back as returns. Net value is ₹85,000.
- All sales within your own state: ₹212.50 CGST + ₹212.50 SGST = ₹425
- All sales to other states: ₹425 IGST
That ₹425 does not belong to the marketplace and it is not a fee. It is credited against your own GST liability.
How to actually claim it — the part sellers miss
The credit does not appear by magic and it is not automatic in your return. The chain is:
- The marketplace files GSTR-8 by the 10th of the following month, declaring the TCS it collected against your GSTIN.
- That flows into your GSTR-2X / TCS credit view on the portal.
- You must accept it. Once accepted, the amount lands in your electronic cash ledger.
- You then use that cash ledger balance to pay your GSTR-3B liability.
If you sell on several marketplaces
Each platform deducts and reports its own TCS independently — Meesho files its GSTR-8, Amazon files its own, and so on. All of those credits land in the same electronic cash ledger under your GSTIN. There is one pool, not four.
This means your reconciliation has to be per-platform on the way in and consolidated on the way out. If your ledger shows less than the sum of what all platforms deducted, at least one platform's GSTR-8 is missing, late, or filed against a wrong GSTIN.
When TCS does not show up in your ledger
The usual causes, roughly in order of frequency:
| Cause | What to do |
|---|---|
| You have not accepted the credit on the portal | Accept it. This is the most common cause by a wide margin. |
| The marketplace has not filed GSTR-8 yet | Wait until after the 10th of the following month before investigating further. |
| Wrong GSTIN registered on the seller panel | Fix it on the platform immediately — every month it stays wrong is credit going to someone else's ledger, and recovering it is difficult. |
| You have multiple GSTINs and the credit is in a different one | Check each registration separately. Credit follows the GSTIN the platform holds. |
| Timing — sale in one month, TCS reported in the next | Usually resolves itself. Compare a rolling three-month window rather than a single month. |
Getting TCS back as cash
If your output liability is consistently smaller than the TCS being collected, the balance simply accumulates in the cash ledger. That happens to sellers whose sales are largely at 5% while TCS is collected on all of it, and to sellers with heavy input credit.
An accumulated cash ledger balance can be refunded — it is your money and there is no requirement to leave it sitting there. This is worth doing if the balance has grown to something material, because that cash is doing nothing for your working capital. The refund application is a portal process; if the amount is significant, it is worth having a practitioner file it.
TCS is not TDS — and both may apply
Two different taxes get confused constantly:
| TCS under GST (Sec 52) | TDS under Income Tax (194-O) | |
|---|---|---|
| Law | CGST Act | Income Tax Act |
| Rate | 0.5% of net taxable supplies | Applies to gross sales — confirm the current rate for your year |
| Credited to | GST electronic cash ledger | Form 26AS / income tax account |
| Used against | Your GST liability | Your income tax liability |
Both can be deducted from the same sale. They are claimed in completely different places, at different times of year, and one does not offset the other. If your marketplace settlement shows two separate deductions, that is why.
See exactly what each marketplace deducted
GSTWali reads your settlement and sales reports and shows commission, shipping, TCS and GST separately per platform — so you can check the credit that should be in your ledger against what was actually taken.
Try it free →Frequently asked questions
What is the current TCS rate for eCommerce sellers?
TCS under Section 52 of the CGST Act is 0.5% of the net value of taxable supplies. For intra-state supplies it is split as 0.25% CGST plus 0.25% SGST; for inter-state supplies it is 0.5% IGST. The rate was reduced from 1% by Notification 15/2024-Central Tax with effect from 10 July 2024.
Is TCS an extra cost to the seller?
No. TCS is your own tax collected in advance. Once the marketplace files GSTR-8 and you accept the credit on the portal, the amount lands in your electronic cash ledger and can be used to pay your GST liability, or refunded if it accumulates.
Why is my TCS not showing in my cash ledger?
The most common reason is that you have not accepted the TCS credit on the portal - it does not flow automatically. Other causes are the marketplace not yet having filed GSTR-8 (due the 10th of the following month), a wrong GSTIN registered on your seller panel, or the credit sitting under a different GSTIN if you hold more than one.
Is TCS calculated on gross sales or after returns?
On the net value: total taxable supplies made through the platform in the month, minus supplies returned in that month. Marketplace commission and fees are not deducted before computing TCS.
Can I get a refund of accumulated TCS?
Yes. If your TCS credit consistently exceeds your output GST liability, the balance builds up in your electronic cash ledger and can be claimed as a refund through the portal. It is your money and there is no requirement to leave it there.
What is the difference between TCS and TDS for online sellers?
TCS under Section 52 is a GST provision at 0.5% of net taxable supplies, credited to your GST electronic cash ledger. TDS under Section 194-O is an income tax provision, credited to your Form 26AS and used against income tax. Both can be deducted from the same sale and they are claimed in entirely different places.