What does every line on your settlement actually mean?
A marketplace settlement reads like a tax notice written by a courier company. This page is the translation: every deduction term you will meet on an AJIO or Meesho statement, in plain English — what it is, how it is calculated, whether it is recoverable, and which lines deserve a second look before you accept them.
- Every settlement line belongs to one of three families: priced lines (commission, freight, ads — formula-driven, rarely worth disputing), judged lines (weight adjustments, reversals, RTO and claim lines — frequently wrong, always worth verifying), and statutory lines (TCS 0.5%, TDS 0.1% — recoverable at filing time).
- The seven most misunderstood terms — weight discrepancy, reverse freight, RTO charge, return reversal, GST on fees, claim adjustment, negative balance — are decoded card by card below. The rest of the glossary follows in prose.
- The working rule: if a formula produced the line, check the rate card once a quarter. If a human, a scan, or a weighing machine produced it, verify it every cycle — that is where the money leaks.
Three families of deduction, three different responses
The fastest way to stop being intimidated by a settlement is to sort its lines into three buckets. Priced lines are the rate card doing its job: commission on the sale, GST on that commission, forward freight for delivering the parcel, ads you chose to run. They are predictable to the rupee, and your only real move is knowing the rates and pricing your products accordingly. Statutory lines — TCS under GST section 52 and TDS under section 194-O — are the government collecting through the marketplace; they are small, mandatory, and recoverable when you file.
Judged lines are the third family, and the reason this glossary exists. A weight-discrepancy adjustment depends on a scan at a courier hub. A return reversal depends on whether a warehouse marked your return received. An RTO charge depends on a delivery attempt someone may or may not have made. Seller communities are full of documented cases where these lines were simply wrong — and reversed on dispute. You do not need to distrust every line. You need to know which family each line belongs to, and give the judged ones the scrutiny they have earned.
The seven most misunderstood deduction terms
These are the lines sellers ask about most, argue about most, and — in the case of the judged ones — win reversals on most. Learn these seven and the rest of the statement is arithmetic.
- 01
Weight-discrepancy adjustment
The courier re-weighed or re-measured your parcel and billed a higher slab than you declared — often on volumetric weight, commonly length × breadth × height / 5000. Judged line: hub scans are frequently sloppy. Photograph every parcel on the scale with dimensions visible and dispute mismatches with that evidence.
- 02
Reverse freight
Shipping for a customer return travelling back to you — and yes, the seller usually pays for the round trip. Priced line with a judged edge: the rate is rate-card, but whether that return was genuine (and whether the right item came back) is worth checking against what actually arrived.
- 03
RTO charge
Return-to-origin: the parcel never got delivered — refused, unreachable, fake attempt — and came back. You typically pay forward freight, sometimes a return leg too, and get no sale. Judged line when the delivery attempt itself is in doubt; a pattern of RTOs from one pincode or courier is evidence, not bad luck.
- 04
Return reversal
The payout you received (or were due) for an order is clawed back because the buyer returned it. Legitimate when a resalable item comes back; disputable when the return never physically arrives, arrives as a different product, or arrives destroyed. Match every reversal line against your returns shelf, every cycle.
- 05
GST on fee
18% GST charged on the marketplace's services to you — commission, freight, ads — not on your sale. Statutory-priced hybrid, and the most under-claimed line on the statement: it is input tax credit against your GSTIN. Collect the tax invoices and claim it in your filings; ignoring it is donating margin.
- 06
Claim adjustment
A line created by a dispute outcome — yours or the buyer's. A claim you won arrives as a credit; a buyer claim that went against you arrives as a debit, sometimes long after the order. Judged line by definition: every debit adjustment should map to a claim you can see the reasoning for. One you cannot trace is a ticket.
- 07
Negative balance
Deductions exceeded earnings in some cycle, and the shortfall carries forward — your next payout repays the hole before anything reaches your bank. Not a deduction itself but the ghost of previous ones: trace it back to the cycle that created it and audit that cycle's judged lines before accepting the carry-forward.
The remaining lines, in one pass
Commission is the marketplace's selling fee, a percentage of order value that varies by category — the biggest single line and the one to know cold when pricing. Forward freight is delivery shipping on the outbound leg, billed by weight slab and zone. SLA penalty and cancellation fee are operations fines — late dispatch and seller-cancelled orders respectively — and the deductions most within your control, with waiver paths when the fault was a courier no-show or a panel outage.
TCS is 0.5% collected under GST s.52 and credited against your GSTIN; TDS is 0.1% deducted under s.194-O against your PAN — both recoverable at filing, both worth reconciling against your returns. Ads deduction is your promotional spend netted out of the payout rather than billed separately; easy to forget, painful to discover. Exact rates and slabs on all the priced lines are policy — check the current rate card on your seller panel rather than any number in a screenshot.
You shouldn't need a glossary. You should have a system.
Knowing what every line means is step one. Actually checking every line, on every settlement, on two marketplaces, every cycle — that is a job, and it is exactly the kind of job a two-person team drops the moment dispatch gets busy. Robnu does it as software: every AJIO and Meesho settlement line is parsed, classified into priced, judged, or statutory, and reconciled against what the order should have paid — freight against real weight, reversals against returns that actually arrived, penalties against the dispatch record.
Clean lines stay quiet. Wrong ones surface with the evidence already attached, and the ones worth fighting get filed as claims — autonomous filing is rolling out now, with the rare judgement call still asking you for one approval click. The glossary stops being homework and becomes a dashboard.
Settlement deductions, answered
Because a settlement is not a payment — it is a netting exercise. The marketplace starts from your sale value and subtracts everything you owe it for that cycle: its selling fees and the GST on those fees, the shipping it arranged in both directions, statutory tax collections it must make on the government's behalf, penalties from your operations, reversals for returns, and any shortfall carried over from an earlier cycle. Each of those is a separate line with a separate logic. None of them is automatically wrong — but several of them are frequently wrong in practice, which is why reading the statement matters.
Both are statutory, both are small percentages, and both are recoverable — they are not costs if you do your filings. TCS is tax collected at source under GST section 52: the marketplace collects 0.5% of taxable sales and deposits it against your GSTIN, where it appears as a credit you claim in your GST filings. TDS is tax deducted at source under Income Tax section 194-O: 0.1% of gross sales deposited against your PAN, visible in your Form 26AS and adjustable against your income tax. Treat both as prepaid tax, not as fees — and reconcile them at filing time.
The marketplace's services to you — commission, shipping, ads — are themselves taxable services, so GST at 18% is charged on those fees and shown as its own deduction line. It is not GST on your sale to the buyer; it is GST on what the marketplace charged you. The practical upside is that this GST is input tax credit: if the marketplace issues proper tax invoices against your GSTIN, you can claim it in your GST filings and recover it. Sellers who ignore these lines routinely overpay GST — the credit is sitting in the statement unclaimed.
The judged ones, not the priced ones. Commission, freight rates, TCS and TDS are formula-driven — disputing them is arguing with a rate card. Weight-discrepancy adjustments, return reversals where the item never came back or came back wrong, RTO charges on deliveries the courier never genuinely attempted, claim adjustments, and penalties applied despite courier fault all involve someone's judgement or someone's scan — and seller communities consistently report reversals on exactly these lines when the evidence is solid. The rule of thumb: if a human or a weighing machine decided it, verify it.
It is what happens when a cycle's deductions exceed that cycle's earnings — a return-heavy fortnight can genuinely leave you owing the marketplace money. The shortfall does not vanish; it carries forward and is recovered from your next payout before anything reaches your bank. This is the line that explains the classic mystery of a ₹0 payout in a week of healthy sales. Find the carried-forward figure on the statement, trace which cycle created it, and verify the deductions in that cycle — a negative balance built on a wrong reversal is worth disputing at the source.
Robnu reads every AJIO and Meesho settlement line automatically and reconciles it against what each order should have paid — freight against the real weight and zone, reversals against whether the return actually arrived back, penalties against the dispatch record it already holds. Formula lines that check out are marked clean; judged lines that do not are flagged with the evidence assembled. When a flagged deduction is worth fighting, Robnu files the claim — fully-autonomous filing is rolling out, and the rare case that needs your judgement asks for a single approval click first.
Where this comes from
- AJIO and Meesho seller panel documentation on settlement statements, rate cards and dispute windows (seller panels and learning hubs).
- Statutory provisions: TCS at 0.5% under GST s.52 and TDS at 0.1% under Income Tax s.194-O (post-2024 revisions); volumetric weight commonly computed with a /5000 divisor.
- Recurring seller reports of wrong weight adjustments, reversals and RTO charges — and their dispute outcomes: public seller community threads (Reddit r/IndiaBusiness, seller Facebook and Telegram groups), 2024–2026.
Related guides & pages
Meesho charges
The full Meesho fee structure, applied to real order math.
Weight discrepancy
The most disputable line of all, and how to win the dispute.
TCS & GST
The statutory lines explained, and how to recover them at filing.
Payment reconciliation
How Robnu classifies and verifies every settlement line for you.