GST for First-Time Amazon and Flipkart Sellers
Short answer: Yes. Anyone selling on Amazon or Flipkart must have GST registration before listing a product, whatever their turnover. The marketplace also deducts 1% Tax Collected at Source on your sales, and stock held in a fulfilment centre in another state can require a separate GST registration for that state.
Key takeaways
- The ₹40 lakh and ₹20 lakh turnover thresholds do not apply to marketplace sellers. Even a single listing requires a valid GSTIN.
- Amazon and Flipkart deduct 1% TCS on sales made through the platform, which shows up as credit in your electronic cash ledger.
- TCS credit offsets your GST liability only if it is reconciled against GSTR-1 and GSTR-3B each month.
- Inventory stored in a fulfilment centre in a state where you do not otherwise operate may need its own registration.
If you're about to list your first product on Amazon or Flipkart, GST is not optional, and the rules are stricter than for a typical offline business.
Rule One: Registration Is Mandatory From Day One
Unlike standard businesses that register only after crossing ₹40 lakh (goods) or ₹20 lakh (services) turnover, marketplace sellers must register for GST regardless of turnover. Even a single product listing requires a valid GSTIN.
Rule Two: The Marketplace Deducts TCS
Amazon and Flipkart deduct 1% Tax Collected at Source (TCS) on the value of your sales made through their platform. This shows up as a credit in your electronic cash ledger and can offset your GST liability, but only if you reconcile it correctly against your GSTR-1 and GSTR-3B each month.
Rule Three: Fulfilment Centres Can Trigger Multi-State Registration
If Amazon stores your inventory in a fulfilment centre in a state where you don't otherwise operate, you may need a separate GST registration for that state. Many first-time sellers miss this until a warehouse audit flags it.
A Practical Onboarding Order
- Register your business entity (proprietorship, LLP, or private limited) if you haven't already.
- Register for GST. This is mandatory before your marketplace seller account can go live.
- Set up your marketplace seller account and complete KYC.
- Reconcile TCS credits monthly, alongside your regular GSTR-1/3B filing.
Where Sellers Usually Get Stuck
Not the registration itself. Most delays come from TCS reconciliation errors a few months in, once transaction volume picks up. Setting up the right bookkeeping habits from month one avoids a scramble later.
See our dedicated guide: GST Registration for Amazon Sellers.
Official sources
The rules, rates and deadlines described here are set by the government and do change. This is where they are officially published:
- GST Portal, Goods and Services Tax Network (GSTN)
- GST Acts, rules and notifications, Central Board of Indirect Taxes and Customs (CBIC)
Keep reading
- GST BasicsReverse Charge in GST, Explained With the Cases You'll Actually HitReverse charge flips who pays. Most small businesses meet it through transporters, lawyers, and imported software subscriptions, often without realising a liability has arisen.
- RegistrationYou've Just Incorporated. Does the Company Need GST Registration?A certificate of incorporation is not a GST registration, and the GSTIN from your old proprietorship does not transfer to the new company. Here's what a newly formed business actually has to do.
- RegistrationGST Registration Threshold: Is It ₹40 Lakh, ₹20 Lakh, or ₹10 Lakh?Everyone quotes a different number, and they're all partly right. The threshold depends on goods versus services, your state, and whether one of the compulsory-registration rules applies to you.