TCS, TDS and GST on marketplace sales — what each one actually takes.
Three different taxes touch every order you sell on AJIO or Meesho, and they are not the same thing. Two of them are your own money, prepaid, that you can reclaim. This guide explains TCS, TDS and GST in plain English, gives the current rates after the 2024 revisions, and shows how to make sure you get back what is yours.
- TCS (Tax Collected at Source, GST Section 52) is 0.5% of your net taxable supplies since 10 July 2024 — it is your tax, prepaid, reclaimable in the GST portal, not a cost.
- TDS (income-tax, Section 194-O) is 0.1% of gross sales since 1 October 2024, deducted by the marketplace and shown in your Form 26AS to adjust against income tax.
- GST at 18% is charged on the marketplace's fees (commission, shipping) — a real cost, but claimable as input tax credit. Reconcile all three against the portal so nothing is left unclaimed.
TCS, TDS and GST are three different things
Sellers often lump these together as “the taxes the marketplace takes.” They are genuinely separate, governed by separate laws, deposited to separate places, and reclaimed in separate ways. Getting them straight is the difference between leaving money with the government and getting it back.
TCS and TDS are not costs at all — they are advance instalments of your own tax, collected by the marketplace on your behalf and credited to you. GST on fees is a real cost, but it too flows back to you as input tax credit if you are registered and filing.
The 2024 changes matter: both TCS and the 194-O TDS rate were cut sharply, so any older guide you read online is almost certainly quoting the wrong number. The rates below are current.
The rates, current after the 2024 revisions
0.5%
TCS — Tax Collected at Source
0.5% of net taxable supplies (0.25% CGST + 0.25% SGST, or 0.5% IGST) since 10 July 2024, down from 1%. Credited against your GSTIN in the GST portal.
0.1%
TDS — Tax Deducted at Source
0.1% of gross sales since 1 October 2024, down from 1%. Deducted by the marketplace, reflected in Form 26AS, adjustable against income tax.
18%
GST on marketplace fees
18% charged on commission, shipping and collection fees — not on your product. A real cost, but claimable as input tax credit when registered and filing.
What actually lands on a ₹1,000 order
Figures are illustrative — commission varies by category — but the structure is real. Note how small TCS and TDS are compared with commission, and remember both come back to you.
Order value (buyer pays)
gross
₹1,000.00
Commission + 18% GST on the fee
marketplace fee (illustrative)
− ₹165.00
Logistics / shipping
by weight slab & zone
included above
TCS under GST (0.5%)
reclaim in GST portal
− ₹5.00
TDS under 194-O (0.1%)
reclaim via Form 26AS
− ₹1.00
Net payout to bank
before returns/penalties
≈ ₹829.00
Of the roughly ₹171 deducted here, ₹6 (TCS + TDS) is prepaid tax you reclaim — so the true cost of selling this order is the commission and GST on the fee, not the tax lines.
Unreclaimed tax is money you already earned
Because TCS and TDS are small per order, sellers routinely ignore them — and then never reclaim them at filing time. Across a year of orders, the unclaimed total is real money that stays with the government simply because nobody tallied it.
The same applies to input tax credit on the 18% GST charged on fees. If your books do not capture the fee-GST line separately, you cannot claim the credit, and your effective cost of selling rises for no reason other than missing paperwork.
The fix is not tax expertise — it is bookkeeping discipline: capture every tax line per order, then reconcile the totals against the GST portal and Form 26AS before you file.
How Robnu keeps your tax lines filing-ready
Robnu reads your settlement files and captures the commission, GST-on-fee, TCS and TDS lines per order — not as one lump sum, but line by line, tied to the order they came from. That means the totals you need at filing time are already assembled and matched.
When the tax deducted on a settlement does not match what should have been deducted at the current rate, Robnu flags it as a delta. You reclaim what is yours and challenge what is wrong, instead of trusting that the numbers were right.
TCS, TDS and GST, answered
TCS stands for Tax Collected at Source. Under Section 52 of the CGST Act, every e-commerce operator must collect a percentage of the net value of taxable supplies made through its platform and deposit it with the government against your GSTIN. Since 10 July 2024 the rate is 0.5% (split as 0.25% CGST and 0.25% SGST, or 0.5% IGST for inter-state supply), reduced from the earlier 1%.
0.5% of the net taxable supply, effective 10 July 2024. Before that date it was 1%. 'Net' means gross supplies through the platform minus the value of supplies returned during the month, so returns reduce the TCS base.
Section 194-O of the Income-tax Act requires the e-commerce operator to deduct income-tax at source on the gross amount of your sales. Since 1 October 2024 the rate is 0.1%, reduced from the earlier 1%. This is separate from GST TCS — 194-O is income-tax, deducted on gross sales and reflected in your Form 26AS.
No. TCS is your own tax, prepaid on your behalf. The marketplace collects it and deposits it against your GSTIN, and it appears in your GST portal (in the TCS credit statement) where you can claim it against your output GST liability. It reduces your payout in the short term but is not an expense — it is a credit you reclaim.
GST at 18% is charged on the marketplace's own service fees — commission, shipping, collection and similar charges — not on your product itself. This 18% is a genuine cost of selling, but it is available to you as input tax credit against your output GST, provided you are registered and your returns are filed correctly.
Rules differ by platform and by whether you sell taxable or exempt goods, and they have changed over time — so this is one to confirm with your accountant and the platform's current onboarding requirements. Historically, selling taxable goods through an e-commerce operator required GST registration; some relaxations exist for small suppliers of goods within a state. Treat platform onboarding rules and a CA's advice as authoritative here.
TCS appears in your GST portal TCS credit statement; you accept it and it offsets your output GST. TDS under 194-O appears in Form 26AS; you claim it against your income-tax liability. The key is matching the amounts the marketplace deducted on the settlement statement against what actually shows in the portal and 26AS — mismatches mean money you have not reclaimed. Robnu tracks these deductions per order so the totals are ready at filing time.
Where these rates come from
- TCS 0.5% under Section 52 of the CGST Act, reduced from 1% effective 10 July 2024 (0.25% CGST + 0.25% SGST, or 0.5% IGST): CBIC notification following the 53rd GST Council meeting, and GST Council e-commerce FAQ.
- TDS 0.1% under Section 194-O of the Income-tax Act, reduced from 1% effective 1 October 2024, on gross sales: Income-tax Act and CBDT guidance.
- GST at 18% on marketplace service fees and input tax credit eligibility: GST law on supply of services and ITC provisions.
- Applicability of these deductions on marketplace settlements: AJIO and Meesho settlement statement documentation, seller.ajio.com and supplier.meesho.com.
This guide is general information, not tax advice. Rates and rules change; confirm the current position with a qualified chartered accountant before filing.