TCS under GST in 2026: How E-commerce Operators Collect It and How Sellers Claim It Back

If you sell on Amazon, Flipkart, Meesho, Myntra or any other marketplace with a GST registration, your payout is always a little short of your sales. Part of that gap is TCS under GST: tax the marketplace collects at source from your sale proceeds and deposits in your name. This guide is for online sellers and their accountants. It explains section 52, the 2026 rate, who collects and on what, GSTR-8, how to get the money into your cash ledger, how it differs from income-tax TDS, and a full month's worked example in rupees.

Quick answer

Under section 52 of the CGST Act, an e-commerce operator that collects payment on behalf of sellers must keep back 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) of the net taxable value of supplies made through it by registered sellers (sales minus returns in the month). It pays this and files GSTR-8 by the 10th of the next month. The seller accepts the entries under TDS and TCS credit received on the GST portal, files the statement, and the amount lands in its electronic cash ledger.

• Rate: 0.25% CGST + 0.25% SGST, or 0.5% IGST — since 10 July 2024 (earlier 1%)

• Collected on taxable value, not on the GST-inclusive price

• No GST TCS on sellers selling on an enrolment ID without a GSTIN

• Separate from income-tax TDS of 0.1% under section 393 (old 194-O)

What TCS under GST is and why it exists

TCS stands for tax collected at source. Under GST it applies only to e-commerce. Section 52 says every electronic commerce operator, not being an agent, must collect an amount at a rate notified by the government, not exceeding 1%, of the net value of taxable supplies made through it by other suppliers, where the operator collects the consideration. In practice: when a buyer pays a marketplace for your product, the marketplace holds back a small percentage before it settles your payout, and pays that to the government in your name.

The amount is not an extra tax on you. It is an advance payment of your own GST, much like TDS deducted by a customer. The government gets a trail of every seller's online sales, reported by the platform, which it can match with what the seller reports in GSTR-1 and GSTR-3B. That matching, set out in section 52(8) to (11), is the real purpose: if the operator reports more sales than you do and the difference is not fixed, the extra is added to your tax liability with interest.

TCS under GST is easily confused with two other deductions. TDS under GST, in section 51, is deducted by government buyers and, since October 2024, buyers of metal scrap; see our guide to TDS under GST. Income-tax TDS on e-commerce sales is a separate deduction under the Income-tax Act. Both are explained further below.

GST TCS at a glance (2026)

0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST)

TCS on net taxable value

since 10 July 2024

10th of the next month

GSTR-8 and payment due

for each month's collection

31 December after the financial year

GSTR-9B annual statement

section 52(5)

0.1%

Separate income-tax TDS

section 393, old 194-O

Who must collect TCS, and on which sales

Section 52 applies to an "electronic commerce operator" — any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce — that collects the consideration for the supplies. Marketplaces such as Amazon, Flipkart, Meesho, Myntra and Nykaa, which collect the buyer's payment and settle with sellers later, are typical examples. An operator that only lists sellers and lets buyers pay them directly does not collect consideration and so does not collect TCS on those sales. Section 24 requires every person who must collect TCS to register under GST, whatever its turnover.

TCS is calculated on the net value of taxable supplies: the total taxable value of goods and services supplied through the operator by all registered persons during the month, minus the taxable value of supplies returned to sellers during the same month. Three things are outside that base:

• Supplies by unregistered sellers. Since 1 October 2023, Notification 34/2023-Central Tax lets small sellers of goods sell through marketplaces within one state on a PAN-based enrolment number instead of a GSTIN. Because the base counts only supplies by registered persons, no GST TCS is collected from them. Our guide on how to sell on Meesho explains the enrolment route.
• Services taxed on the operator under section 9(5). Where the law makes the operator itself liable to pay GST — restaurant food delivered through apps, passenger transport by cab aggregators, certain accommodation and housekeeping services, and since 22 September 2025 local delivery services supplied through an operator by persons not liable to register — the operator pays the GST and there is no TCS.
• Exempt and nil-rated supplies. TCS applies to taxable supplies only, so a seller of fresh fruit or unbranded rice on a marketplace does not suffer GST TCS on those sales.

Composition taxpayers, who have been allowed to sell goods through marketplaces since 1 October 2023 within their own state, are registered persons, so TCS is collected from them and they claim it the same way. The GST portal's GSTR-8 guidance confirms that composition sellers' GSTINs can be reported in GSTR-8 for intra-state supplies.

The TCS rate and how it is calculated

Section 52 fixes a ceiling of 1% and lets the government notify the actual rate on the GST Council's recommendation. From 1 October 2018, when TCS began, Notification 52/2018-Central Tax set it at 0.5% CGST and 0.5% SGST, or 1% IGST. From 10 July 2024, Notification 15/2024-Central Tax replaced "half per cent" with "0.25 per cent", and matching state and integrated tax notifications followed, so the rate became 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) in total. The GST rate rationalisation of 22 September 2025 changed GST rates on goods and services but did not touch the TCS rate.

The split follows the place of supply. For a sale where the seller and buyer are in the same state, the operator collects 0.25% CGST and 0.25% SGST or UTGST. For an inter-state sale it collects 0.5% IGST. The base is the taxable value — the price excluding GST — after deducting the value of goods returned in the same month. Returns in a later month reduce that later month's base.

Note that the TCS rate does not depend on your product's GST rate. A seller of 5% garments and a seller of 18% electronics both suffer 0.5% of taxable value. For a 5% seller this is a tenth of its output tax, so the credit often piles up in the cash ledger.

GSTR-8: the operator's return

Rule 67 requires the operator to file FORM GSTR-8 electronically each month. It lists, seller by seller, the supplies made through the platform, returns, the net taxable value and the TCS collected, and the operator pays the TCS from its cash ledger when it files. Section 52(3) and (4) give the operator ten days after the end of the month for both the payment and the statement, so GSTR-8 is due by the 10th of the next month. A nil GSTR-8 is not needed for a month with no TCS liability and no auto-populated rejected entries.

Errors are corrected in a later month's GSTR-8, with interest, but section 52(6) bars corrections after 30 November after the financial year (or the annual statement date, if earlier). Since 1 October 2023, section 52(15) also bars filing any GSTR-8 more than three years after its due date. The annual statement, GSTR-9B, is due by 31 December after the financial year.

Operators also face information demands. Under section 52(12) to (14), an officer of the rank of Deputy Commissioner or above can require an operator to give details of supplies made through it or of sellers' stock in its warehouses, within 15 working days, with a penalty of up to ₹25,000 for not complying. Late GSTR-8 filings attract a late fee from the October 2022 return period onwards, according to the GST portal, and late payment of TCS attracts interest at 18% a year.

How sellers claim TCS credit

The money does not reach you automatically. Rule 67(2) makes the operator's details available to each registered seller on the portal, and the seller must act on them.

Getting TCS into your cash ledger

1. 1

   Wait for the operator's GSTR-8

   Entries appear after the operator files GSTR-8, usually by the 10th of the next month.

2. 2

   Open the TCS tile

   On gst.gov.in go to Services › Returns › TDS and TCS credit received, pick the financial year and period, and open TCS Credit Received.

   GST portal
3. 3

   Accept or reject each entry

   Match the operator's net value with your settlement report and GSTR-1. Accept correct entries; reject wrong ones with a remark.

4. 4

   File the statement

   Preview, tick the declaration and file with DSC or EVC. Accepted amounts are credited to the electronic cash ledger only after filing.

5. 5

   Use or refund the credit

   Use the cash ledger to pay GST in GSTR-3B, or claim a refund of an excess balance.

Rejected entries flow back into the operator's next GSTR-8, in a table of records rejected by suppliers, so the operator can correct them. The portal allows an operator to amend a record only once if the supplier has not yet accepted it or has rejected it; after acceptance no amendment is possible. If the operator amends an entry before you act on it, the old one is disabled and the amended record appears in a later period. Composition sellers use the same tile.

TCS credit sits in the cash ledger, not the credit ledger. It is not input tax credit and is not subject to ITC conditions or GSTR-2B matching. You can use it to pay any GST, interest, late fee or penalty, or claim an excess balance as a refund on the portal. Many low-rate sellers keep a running cash balance from TCS; check it before paying fresh cash with GSTR-3B.

Worked example: an online seller's month

Neha sells cotton kurtis from Jaipur on two marketplaces under a regular GSTIN in Rajasthan. Her kurtis are priced below ₹2,500 a piece, so they attract 5% GST. In October 2026 her marketplace sales, at taxable value excluding GST, are ₹6,00,000: ₹4,00,000 to buyers outside Rajasthan and ₹2,00,000 within the state. Goods worth ₹50,000 come back in the same month, ₹30,000 of them inter-state and ₹20,000 intra-state.

Her output GST on the net ₹5,50,000 is 5%, or ₹27,500, which she reports in GSTR-1 and GSTR-3B, showing each operator's GSTIN against the sales made through it. The operators file GSTR-8 for October by 10 November. Neha opens the TCS tile, compares each operator's figures with her settlement reports, accepts them and files the statement; ₹2,750 lands in her cash ledger. When she files GSTR-3B for October by the 20th, she sets off the ₹27,500 first against her input tax credit — say ₹18,000 on fabric, packing and shipping — and pays the remaining ₹9,500 partly from the ₹2,750 TCS balance and partly in fresh cash.

Separately, each marketplace deducts income-tax TDS of 0.1% on the gross amount of her sales under section 393 of the Income-tax Act, 2025, which she claims in her income-tax return. If one operator's GSTR-8 shows ₹3,90,000 of net inter-state sales against her ₹3,70,000 because a return was processed late on its side, she rejects that entry with a remark, the operator corrects it in its next GSTR-8, and she accepts the corrected entry. If she ignored the difference, it could be added to her own liability under section 52(10).

Recording TCS in your books and getting a refund

In your accounts, TCS is neither income nor expense. When the marketplace settles a payout, record the full sale and GST as usual, then show the TCS kept back as a receivable, often called "GST TCS receivable", split into IGST, CGST and SGST. When you accept the entries and file the statement, move the amount to the electronic cash ledger account; when you use it in GSTR-3B, it reduces your GST payable like any other cash payment. Keeping the receivable operator-wise and month-wise makes the year-end reconciliation with the GST portal and the annual return simple.

Sellers of low-rate goods — 5% garments, footwear or food items — often find that ITC alone covers most of their output tax, so the TCS balance keeps growing. An excess balance in the electronic cash ledger can be claimed back through a refund application on the portal. Before claiming, confirm that no demand, interest or late fee is pending, because the cash ledger is the first place an officer will look to recover dues. For a seller who stops selling online or cancels registration, TCS accepted up to the last month can still be used against the final return liability or refunded.

GST TCS vs GST TDS vs income-tax TDS

Common mistakes and how they are fixed

Not filing the TDS and TCS credit statement. Many sellers accept the entries and forget to file. Until the statement is filed, nothing reaches the cash ledger.

Mismatch between GSTR-1 and GSTR-8. The usual causes are reporting gross sales without deducting returns, recording sales in a different month from the operator, or reporting marketplace sales without the operator's GSTIN. Reconcile month by month using the settlement report and the operator's tax report, and fix your own GSTR-1 in a later month where you are wrong.

Treating TCS as an expense or as ITC. TCS is your own tax paid in advance. In the books it is a receivable from the government until it reaches the cash ledger, then a payment of GST. It must not be added to cost or claimed as input tax credit.

Quoting the old 1% rate. Settlements from before 10 July 2024 used 1%; anything after should be 0.5%. If a settlement shows 1% for a later period, raise it with the operator.

Assuming unregistered sellers are covered. Sellers on an enrolment number have no GSTIN and suffer no GST TCS, but must stay within their state and their turnover threshold. Once registered, TCS starts from the date of registration.

Ignoring income-tax TDS. The 0.1% income-tax deduction does not appear in the GST portal. Check it in your annual tax statement and claim it in your return.

Official links

• Section 52, CGST Act — collection of tax at sourceRate ceiling, GSTR-8, credit and matching
• Rule 67, CGST Rules — GSTR-8Statement and supplier credit
• GST portal — TDS and TCS credit received (user manual)How sellers accept and file
• GSTR-8 FAQs (GST portal)Operator filing rules

What to do next

Download last month's settlement reports from each marketplace, total the TCS shown, and compare it with the TCS tile on the GST portal; accept, file and watch the cash ledger. Then work out your true margin per order with our marketplace profit calculator, and read our guide to selling on Meesho or starting an e-commerce business for the platform side. If you also sell to government buyers, see TDS under GST.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

What is TCS under GST?

Tax collected at source (TCS) under section 52 of the CGST Act is an amount that an e-commerce operator such as a marketplace keeps back from the money it collects for sellers. It is 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) of the net taxable value of supplies made through the platform by registered sellers. The operator deposits it and reports it in GSTR-8, and the seller gets it as credit in its electronic cash ledger.

What is the current GST TCS rate for e-commerce?

The rate is 0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST) of the net value of taxable supplies, from 10 July 2024. Notification 15/2024-Central Tax halved the central share from 0.5% to 0.25%, with matching cuts in the state and integrated tax notifications. Before that the total was 1%. No change has been made under GST 2.0.

What is the due date of GSTR-8?

GSTR-8 must be filed, and the TCS paid, by the 10th of the next month after the month of collection. The operator's annual statement, GSTR-9B, is due by 31 December after the financial year. Mistakes in a GSTR-8 can be corrected in a later month's statement, but not after 30 November after the financial year (or the annual statement date, if earlier).

How does a seller claim TCS credit under GST?

After the operator files GSTR-8, the TCS entries appear on the GST portal under Services › Returns › TDS and TCS credit received. The seller accepts or rejects each entry, then files that statement. Only after filing does the accepted amount reach the electronic cash ledger, from where it can be used to pay GST or claimed as a refund.

Is GST TCS the same as the TDS deducted by Amazon or Flipkart?

No. GST TCS (0.5% (0.25% CGST + 0.25% SGST, or 0.5% IGST)) is under the GST law and comes back to your GST cash ledger. The income-tax TDS of 0.1% that marketplaces deduct under section 393 of the Income-tax Act, 2025 (old section 194-O) is credited against your PAN and claimed in your income-tax return. Your settlement report usually shows both.

Do sellers without GST registration suffer TCS?

No. Section 52 applies to supplies made through the operator by registered persons. Small sellers who sell goods within one state on an enrolment number under Notification 34/2023-Central Tax have no GSTIN, so the operator does not collect GST TCS from them, although income-tax TDS rules still apply.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.CGST Act, 2017 — section 52 (collection of tax at source) — CBIC · accessed 9 October 2026
2. 2.CGST Rules — rule 67 (statement of supplies through an e-commerce operator) — CBIC · accessed 9 October 2026
3. 3.FAQs — Form GSTR-8 — GSTN (GST portal user guide) · accessed 9 October 2026
4. 4.Manual — TDS and TCS Credit Received — GSTN (GST portal user guide) · accessed 9 October 2026
5. 5.Notification No. 15/2024–Central Tax (10 July 2024) — Ministry of Finance (reproduced by TaxHeal) · accessed 9 October 2026
6. 6.GST on e-commerce operators — TCS under section 52: step-by-step guide — TaxAJ · accessed 9 October 2026
7. 7.FAQs on TDS under GST (Commercial Taxes Department, Karnataka) — Commercial Taxes Department, Karnataka · accessed 9 October 2026