Every e-commerce seller on Amazon, Flipkart, Meesho, or any other marketplace gets 1% deducted from every payment. Most know it’s called TCS. Far fewer know exactly what it is, how it works, or how to claim it back.
Section 52 of the CGST Act requires every e-commerce operator to collect Tax Collected at Source (TCS) at 1% (0.5% CGST + 0.5% SGST) on net taxable sales made through their platform by registered sellers. The collected TCS is deposited against your GSTIN and is available for offset against your GST liability or refund.
Selling on any marketplace and not sure how to claim your TCS credit? WhatsApp us and we’ll check your Electronic Cash Ledger with you.
Quick Summary — TCS Under Section 52
| Item | Detail |
| Who collects TCS | E-commerce operator (Amazon, Flipkart, Meesho, etc.) |
| Rate | 1% of net value of taxable supplies (0.5% CGST + 0.5% SGST, or 1% IGST for inter-state) |
| Calculated on | Net value = total supply value minus returns in the same month |
| When deposited by operator | 10th of the following month |
| Where it appears for you | Electronic Cash Ledger (ECL) on your GST portal |
| How to use it | Offset against output GST liability in GSTR-3B, or claim refund |
💡 TaxKitab Tip Many e-commerce sellers reconcile their GST returns but forget to reconcile their TCS credits. The 1% TCS appears in your Electronic Cash Ledger only after the marketplace files their GSTR-8 and the data flows to your portal. If a marketplace files their GSTR-8 late, your TCS credit appears late — but it’s still there, waiting. Check your ECL every quarter against the TCS amounts shown in your marketplace settlement reports. Unclaimed TCS is money sitting in a government ledger that belongs to you. — From our GST E-Commerce Guide (Book 4). Available at taxkitab.com/books
TCS vs TDS vs GST
| Particular | GST TCS | Income Tax TDS |
|---|---|---|
| Law | CGST Act | Income Tax Act |
| Section | 52 | Various Sections |
| Deducted By | E-commerce Operator | Payer |
| Appears In | Electronic Cash Ledger | Form 26AS / AIS |
| Used For | GST Liability | Income Tax Credit |
Why Your Tax Liability Is Calculated Before TCS Is Deducted
TCS doesn’t reduce your GST liability at the invoice level. You still charge full GST on every sale — 18% on electronics, 5% on certain categories, whatever the applicable rate is. The marketplace collects TCS separately on top of the settlement amount and deposits it in your name. Your GST liability in GSTR-3B is still based on your full output tax, and you then offset the TCS credit from your ECL against that liability. Think of it as a prepayment of tax, not a reduction in the tax itself.
How to Actually Use Your TCS Credit
When you file GSTR-3B, your output GST liability appears in the tax tables. You pay it from your Electronic Cash Ledger. Your TCS credits from marketplace deposits already sit in that ledger. So when you pay your GSTR-3B liability, the TCS credits offset part of the cash you’d otherwise need to deposit separately. If your TCS credits accumulated during the month exceed your total GST liability, the balance stays in your ECL for future periods or can be claimed as a refund.
What Changed With IMS for E-Commerce in 2026
From 1 April 2026, if you’re a registered seller buying goods to resell on a marketplace, your supplier invoices now flow through IMS before hitting your GSTR-2B. This is unchanged from any other business. What’s specific to e-commerce: the marketplace itself (as an operator) is not a supplier to you — their TCS deduction flows through the ECL, not through IMS. Keep these two flows separate in your reconciliation.
Common Mistakes E-Commerce Sellers Make
Not reconciling marketplace settlement reports with GST returns. Your settlement report from Amazon or Flipkart shows returns, cancellations, and net payouts. Your GST GSTR-1 must show gross sales, with returns separately accounted. A mismatch between these two creates exactly the GSTR-1/3B discrepancy that triggers notices.
Not checking whether the marketplace filed GSTR-8 on time. If the marketplace is late filing their GSTR-8, your TCS credit doesn’t appear in your ECL on schedule. This is the marketplace’s compliance failure, but it affects your cash flow and reconciliation. Check your ECL against expected TCS amounts before assuming a credit is missing.
Frequently Asked Questions
Does TCS under Section 52 apply to unregistered sellers too? TCS under Section 52 applies to supplies made by registered persons through the operator. Unregistered sellers are subject to a separate mandatory registration requirement — if you sell through an e-commerce platform above a threshold, you may be required to register regardless of your turnover size.
Does the abolished Section 206C(1H) affect TCS on e-commerce sales? No. Section 206C(1H) — the general sale-of-goods TCS provision — was abolished from 1 April 2025. Section 52 of the CGST Act is a completely separate provision specific to e-commerce operators under GST. It is unaffected by the income tax abolition we covered in our Section 194Q and 206C(1H) post.
What if I sell on multiple platforms? Each marketplace files their own GSTR-8 and deposits TCS separately. Your ECL will show credits from each marketplace. Reconcile marketplace by marketplace, not as a combined total, to catch any missing credits from specific operators.
Can I claim a refund of TCS accumulated in my ECL? Yes — if TCS credits exceed your current GST liability and you have no pending returns, you can claim a refund from the ECL. This is available through the standard refund process on the GST portal.
Does TCS under Section 52 affect my income tax liability?
No. GST TCS under Section 52 is completely separate from income tax. It is deposited into your GST Electronic Cash Ledger and can only be used for GST payments or claimed as a GST refund. It does not reduce or increase your income tax liability.
References
- CGST Act, 2017 — Section 52 (collection of tax at source by e-commerce operators)
- CGST Act, 2017 — Section 9(5) (suppliers through e-commerce — liability shifts to operator for specified categories)
This post connects with our ITC mismatch guide — e-commerce reconciliation involves both input-side ITC verification and output-side TCS tracking, and gaps in either create the same downstream compliance risk.
TaxKitab assists Amazon, Flipkart, Meesho, Shopify, and other e-commerce sellers with GST registration, GSTR-1, GSTR-3B, GSTR-8 reconciliation, TCS reconciliation, and GST notices across India.
Last Updated: 09 July 2026
Reviewed By: TaxKitab Team
Call or WhatsApp: +91 7448200422 Email: info@taxkitab.com Website: taxkitab.com See our GST Return Filing service or Contact us. For a complete e-commerce GST guide, see our GST E-Commerce Book 4.
