GST for First-Time Amazon and Flipkart Sellers

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

1. Register your business entity (proprietorship, LLP, or private limited) if you haven't already.
2. Register for GST. This is mandatory before your marketplace seller account can go live.
3. Set up your marketplace seller account and complete KYC.
4. 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.