TCS in GST stands for Tax Collected at Source: the 0.5% tax an e-commerce operator such as Amazon, Flipkart or Meesho holds back from your payout and deposits with the government in your name. It is levied under Section 52 of the CGST Act on the net value of taxable supplies you make through the platform. The money is not lost. It reaches your electronic cash ledger once you accept it on the GST portal.
Sellers who never open the "TDS and TCS Credit Received" form leave this money parked with the government indefinitely. On ₹50 lakh of annual marketplace sales, that is ₹25,000 of cash that could have paid your GST.
Point | Position |
|---|---|
Full form | Tax Collected at Source |
Law | Section 52, CGST Act, 2017 |
Who collects | Every e-commerce operator that collects the consideration for supplies made by other sellers through its platform |
Rate from 10 July 2024 | 0.5% of net taxable value: 0.25% CGST + 0.25% SGST, or 0.5% IGST (Notification No. 15/2024-Central Tax and No. 01/2024-Integrated Tax, both dated 10-07-2024) |
Rate before 10 July 2024 | 1% |
Operator's statement | GSTR-8, by the 10th of the next month |
Where the seller sees it | "TDS and TCS Credit Received" on the GST portal |
Where it goes | Electronic cash ledger, after you accept and file that form |
What TCS in GST means for a marketplace seller
TCS under GST is a collection mechanism, not an extra tax on top of your GST. The operator deducts 0.5% of your net sales from the amount it owes you, deposits it, and reports it against your GSTIN. You then use it like cash to pay your own GST, or claim it back.
It applies only where the operator collects the money for supplies made by other sellers. A brand selling its own goods on its own Shopify website has nobody collecting TCS on those orders, because Section 52 covers supplies made through a platform by other suppliers. Services where the operator itself pays the tax under Section 9(5), such as restaurant services through food delivery apps, are also outside TCS.
How the 0.5% TCS rate is calculated
The base for TCS is the net value of taxable supplies: your taxable sales through the platform in the month, less the value of goods returned in that month. GST charged on the invoice and exempt supplies are outside the base.
Line | Amount |
|---|---|
Taxable sales through the platform in the month | ₹10,00,000 |
Less returns received in the same month | ₹1,20,000 |
Net taxable value | ₹8,80,000 |
TCS at 0.5% | ₹4,400 |
Split for intra-State sales | ₹2,200 CGST + ₹2,200 SGST |
Split for inter-State sales | ₹4,400 IGST |
Because returns are netted month by month, a month with heavy returns can show a TCS figure much lower than its sales suggest. That is not an error. Match TCS against net sales after returns, never against gross orders.
When TCS reaches your cash ledger each month
TCS follows a fixed monthly sequence, and the dates tell you when to look. The operator must deposit the TCS and file GSTR-8 by the 10th of the month after the sale, so October sales appear for you to accept from about 10 November.
Date | What happens |
|---|---|
During October | You sell through the platform; the operator holds back 0.5% of net value from settlements |
By 10 November | Operator deposits the TCS and files GSTR-8 for October |
10 to 20 November | You review and accept the TCS rows in "TDS and TCS Credit Received" and file the form |
By 20 November | The accepted credit sits in your cash ledger, ready to pay October's GSTR-3B for monthly filers |
A seller who accepts TCS after filing GSTR-3B pays that month's tax from other cash and leaves the TCS for later. Accept first, then file.
TCS under GST versus TDS under income tax
Marketplaces collect two separate amounts, and sellers often mix them up:
Point | GST TCS | Income-tax TDS |
|---|---|---|
Rate | 0.5% of net taxable value | 0.1% of gross amount of sales |
Law | Section 52, CGST Act | Section 393(1), Table Sl. No. 8(v), Income-tax Act, 2025 |
Operator files | GSTR-8, monthly | Form 140, quarterly |
You claim it in | GST electronic cash ledger | Income-tax return, via Form 168 |
Our guide to Section 194-O TDS covers the income-tax deduction in full.
How to claim TCS credit in GST
The credit moves only when you act. According to the GST portal's user manual for the TDS and TCS Credit Received form, accepted TCS is credited to your electronic cash ledger only after you file the form.
Log in to the GST portal and open Services, Returns, Returns Dashboard.
Select the financial year and return period, then open "TDS and TCS Credit Received".
Click the TCS Credit Received tile to see one row per operator GSTIN.
Compare each row's net value and tax with that platform's sales report for the month.
Accept the rows that match; reject a row only if the operator reported a wrong value.
File the form with DSC or EVC.
Check the electronic cash ledger for the credited amount before you file GSTR-3B.
You can file this form before GSTR-1 and GSTR-3B for the month, and there is no late fee for filing it late. Filed actions cannot be undone, so a row you accept is final. A rejected row goes back to the operator, who corrects it through the amendment section of a later GSTR-8.
What you can do with the TCS in your cash ledger
Once TCS is in the electronic cash ledger, it behaves like cash you deposited. You can use it to pay output tax, interest and late fees in GSTR-3B, or claim a refund of the excess balance.
Sellers with high input tax credit on purchases often have little cash liability, so TCS piles up month after month. In that case, file a refund of the excess balance in the cash ledger rather than letting it sit. Our guide to refunding the excess cash ledger balance walks through that application.
Why TCS in GST does not match your sales
Most TCS mismatches come from four causes, and each leaves a recognisable pattern:
What you see | Usual cause | Fix |
|---|---|---|
TCS lower than expected for one month | Returns from earlier months netted in this month | Match against the platform's month-wise net figure |
TCS row missing for a platform | Operator filed GSTR-8 late, or against another GSTIN of yours | Check all your registrations; raise a ticket with the operator |
TCS higher than your GSTR-1 sales | Sales missed in GSTR-1, often a whole state's orders | Correct GSTR-1 through GSTR-1A or the next return |
TCS split between CGST/SGST and IGST differs from yours | Place of supply mapped differently by the operator | Compare state-wise; fix your own reporting if it is wrong |
The third row is the expensive one. The operator's GSTR-8 is the department's independent record of your platform sales, so a gap between it and your GSTR-1 is exactly what scrutiny looks for. Run this match as part of your monthly GST reconciliation.
TCS for sellers registered in more than one State
The operator reports TCS against the GSTIN of the State from which you supply, which in practice is the registration attached to each fulfilment or pickup location. A seller with warehouses in Haryana and Maharashtra receives two sets of TCS credits, one in each registration's cash ledger.
At Complylocal, the TCS gap we find most often in multi-State sellers is credit sitting unaccepted in the second registration, because the team only logs in to the head-office GSTIN. Make the TCS acceptance part of each registration's monthly checklist, not just the main one.
Accounting entry for TCS in GST
Book TCS as an asset, a receivable from the government, at the time you record the settlement. Debit "GST TCS receivable" and credit the marketplace's account, then transfer the receivable to the cash ledger balance when the credit is accepted on the portal.
Never book TCS as a marketplace fee. It inflates your platform cost, understates profit and hides an amount you are entitled to use or recover. Our guide on accounting for an e-commerce business shows how the entry sits in the monthly close.
Want TCS matched and claimed across every marketplace and registration each month? Talk to Ankush's team about e-commerce GST return filing and compliance.
