📌 Mandatory for all Amazon sellers: GST registration is compulsory under Section 24(ix) of the CGST Act for any supplier making sales through an e-commerce operator — regardless of turnover. Even ₹1 in Amazon sales requires GST registration.
1. GST Registration for Amazon Sellers
Unlike offline businesses where the GST threshold is ₹20 lakh (₹10 lakh in special category states), all Amazon sellers must be GST registered — there is no turnover threshold exception. This is because Amazon is classified as an "e-commerce operator" and its sellers fall under the compulsory registration category.
Documents Required for GST Registration
- PAN Card (individual or business)
- Aadhaar Card (for Aadhaar-based verification)
- Proof of principal place of business (electricity bill / rent agreement)
- Bank account details (cancelled cheque or bank statement)
- Photograph
- Digital Signature Certificate (DSC) for companies/LLPs
💡 GST registration typically takes 7–10 working days and is done entirely online on the GST portal. My Tax Sarthi handles this for Amazon sellers in 3–5 days.
2. What is TCS Deducted by Amazon?
Amazon (and all e-commerce operators) is legally required to collect Tax Collected at Source (TCS) from every seller's payment before settlement. TCS rate is 1% of the net value of taxable supplies made through Amazon's platform.
| Supply Type | TCS Rate | Component |
|---|---|---|
| Intra-state sales (seller & buyer in same state) | 1% | 0.5% CGST + 0.5% SGST |
| Inter-state sales (seller & buyer in different states) | 1% | 1% IGST |
This TCS is deducted from your settlement amount by Amazon automatically. For example, if your monthly sales through Amazon are ₹1,00,000, Amazon deducts ₹1,000 as TCS before paying you.
✅ Good news: TCS is not a final tax — it is a credit you can claim against your GST liability. Every rupee deducted as TCS comes back to you.
3. How to Claim TCS Credit in GSTR-2B
Amazon files GSTR-8 every month, depositing the TCS collected from all sellers. This credit appears in your GSTR-2B automatically (Part II — Tax Collected at Source). Here's how to claim it:
1 Log in to GST portal. Go to Returns → Returns Dashboard.
2 Download your GSTR-2B for the relevant month (available after 14th).
3 Check Part II — Details of TCS credit. You'll see Amazon's GSTIN and the TCS amount deposited.
4 While filing GSTR-3B, this TCS amount is automatically reflected in Table 8C (TCS credit available).
5 The TCS credit gets credited to your Electronic Cash Ledger and offsets your net GST payable.
4. GST Returns Amazon Sellers Must File
| Return | Frequency | Due Date | What to Report |
|---|---|---|---|
| GSTR-1 | Monthly (or Quarterly) | 11th of next month | All sales invoices, HSN summary, B2B/B2C breakup |
| GSTR-3B | Monthly (or Quarterly) | 20th of next month | Summary of sales, ITC, TCS credit, net tax payment |
| GSTR-9 | Annual | 31st December | Consolidated annual return (mandatory if turnover > ₹2Cr) |
💡 If your annual turnover is ≤ ₹5 crore, you can opt for the QRMP scheme — file GSTR-1 and GSTR-3B quarterly instead of monthly. Easier compliance for small sellers.
5. GST on Amazon Sales — What to Charge
The GST rate depends on the HSN code of your product. You must charge the correct GST rate on every invoice:
- Find your product's HSN code using our HSN Finder tool
- Add applicable rate (5%, 12%, 18% or 28%) to your selling price
- Issue a proper GST invoice with your GSTIN, buyer details, HSN, rate and amount
- Report invoice details in GSTR-1 each month
6. Amazon Settlement vs GST Turnover
A common confusion: your GST turnover is NOT the settlement amount deposited by Amazon. Your GST turnover is the full selling price of goods sold. Amazon deducts its commission, shipping charges, TCS and other fees before settling — but your GST liability is on the full selling price.
| Component | GST Treatment |
|---|---|
| Product selling price | Your GST turnover — report in GSTR-1 |
| Amazon commission (referral fee) | Amazon charges 18% GST on commission — you claim as ITC in GSTR-3B |
| TCS deducted by Amazon (1%) | Claim credit in GSTR-2B → offset against GST payable |
| Net settlement amount | NOT your turnover — this is after all deductions |
7. Income Tax (ITR) for Amazon Sellers
Amazon seller income is treated as business income under the Income Tax Act. Key points for annual ITR filing:
Which ITR Form?
- ITR-4 (Sugam) — if you opt for presumptive taxation u/s 44AD (6%/8% of turnover as profit, no books needed for turnover ≤ ₹2 crore)
- ITR-3 — if you maintain books of accounts or turnover exceeds ₹2 crore
What to Include in ITR
- All Amazon settlements + other income = gross receipts
- Allowable deductions: packaging costs, Amazon fees, storage, advertising, internet, phone, transport
- TCS deducted by Amazon appears in Form 26AS — claim as advance tax credit in ITR
- If turnover > ₹1 crore, tax audit under Section 44AB is mandatory
⚠️ Audit threshold: If turnover > ₹1 crore (or > ₹10 crore if 95%+ transactions are digital), you need a CA-certified tax audit report (Form 3CB/3CD) filed with your ITR.
8. Common Mistakes Amazon Sellers Make
- Not registering for GST — Amazon may suspend your account and GSTN may issue notice
- Wrong HSN code on invoices — leads to GST rate mismatch and notices
- Not reconciling GSTR-2B with TCS — losing out on TCS credit refunds
- Treating settlement amount as turnover — leads to under-reporting of GST turnover
- Not claiming ITC on Amazon's referral fees — leaving money on the table
- Missing GSTR-3B deadlines — ₹50/day late fee accumulates quickly
9. Monthly GST Compliance Checklist for Amazon Sellers
- ☐ Download Amazon settlement reports for the month
- ☐ Reconcile settlements with invoices raised
- ☐ File GSTR-1 by 11th — all sales invoices
- ☐ Download GSTR-2B after 14th — check TCS credit from Amazon (GSTR-8)
- ☐ Reconcile ITC from supplier invoices with GSTR-2B
- ☐ File GSTR-3B by 20th — claim TCS credit, pay net tax
- ☐ Keep all purchase invoices for ITC claims
Selling on Amazon? Let us handle the compliance.
Monthly GST package for Amazon sellers — GSTR-1 + GSTR-3B + TCS reconciliation. Starting ₹999/month.
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