GST for ecommerce sellers

Identify the selling model

Distinguish sales of your own goods through your website, sales through a marketplace and services supplied through an operator. Record who invoices the customer, collects payment, owns the stock and handles returns. Different models can produce different obligations.

Check whether a specific operator-liability provision applies to the service rather than assuming the marketplace pays GST on every seller’s behalf. Retain the agreement and actual settlement structure used for the assessment.

Assess registration and any conditional exemption

Notification 34/2023-Central Tax provides a conditional exemption from mandatory registration for specified goods suppliers through ecommerce operators. It is not a blanket exemption for all online sellers. Review turnover, territorial restrictions, enrolment and every applicable condition before relying on it.

Assess service-supplier provisions separately. Platform onboarding requirements also do not replace the statutory review. A platform allowing an account to open does not establish that the seller’s tax treatment is correct.

Map inventory and fulfilment locations

List each warehouse and the states from which goods are supplied. Review registration and additional-place requirements for the actual stockholding and fulfilment arrangement. Customer addresses alone do not mean registration in every destination state.

For example, transferring owned stock to a marketplace warehouse in another state needs a different review from shipping directly from the seller’s existing premises. Keep stock-transfer records and invoicing treatment connected to the registration assessment.

Build a gross-to-net settlement bridge

• Customer invoices and gross sales by GSTIN, period and tax category.
• Cancellations, returned goods, refunds and corresponding credit notes.
• Marketplace commission, fulfilment, advertising and other charges with supporting invoices.
• GST tax collected at source where applicable, kept separate from income-tax withholding.
• Other deductions, reserves and adjustments explained individually.
• Net payout reconciled to the bank receipt and outstanding settlement balance.

Keep sales tax separate from platform deductions

A net payout is not the taxable sales value. If a marketplace deducts commission and other amounts before remitting funds, retain the sales invoice and account for the charges separately according to their substance. Do not reduce output-tax reporting merely to match the bank deposit.

Reconcile GST TCS records through the applicable portal process and investigate mismatches with the operator. Distinguish that cash-ledger-related collection from input-tax credit on platform service invoices and from income-tax TDS. Each requires its own evidence and reconciliation.

Control returns and reporting periods

Match each return or refund to the original order and invoice. Identify the credit note, goods movement and reporting period. A customer refund in the platform dashboard does not automatically prove that all required tax adjustments have been made correctly.

Use the current outward-return instructions for supplies through operators and the applicable transaction category. Reconcile marketplace downloads to the books before uploading them; report formats can contain duplicates, cancelled orders or amounts that are not sales.

Prepare a seller compliance file

Retain registration or enrolment records, marketplace agreements, warehouse details, invoices, settlement reports, fee invoices, TCS records and returns. Keep a tracker for unmatched orders and deductions rather than carrying unexplained balances indefinitely.

Bring these records to Kosha.Services for a review of the operating model and settlement reconciliation. Current exemption conditions, operator obligations and return treatment should be checked against the seller’s actual goods, services and locations.