GST for First-Time Amazon and Flipkart Sellers

If you're about to list your first product on Amazon or Flipkart, GST is not optional — and the rules are stricter than for a typical offline business.

Rule One: Registration Is Mandatory From Day One

Unlike standard businesses that register only after crossing ₹40 lakh (goods) or ₹20 lakh (services) turnover, marketplace sellers must register for GST regardless of turnover. Even a single product listing requires a valid GSTIN.

Rule Two: The Marketplace Deducts TCS

Amazon and Flipkart deduct 1% Tax Collected at Source (TCS) on the value of your sales made through their platform. This shows up as a credit in your electronic cash ledger and can be used to offset your GST liability — but only if you reconcile it correctly against your GSTR-1 and GSTR-3B each month.

Rule Three: Fulfilment Centres Can Trigger Multi-State Registration

If Amazon stores your inventory in a fulfilment centre in a state where you don't otherwise operate, you may need a separate GST registration for that state — a detail many first-time sellers miss until a warehouse audit flags it.

A Practical Onboarding Order

1. Register your business entity (proprietorship, LLP, or private limited) if you haven't already.
2. Register for GST — this is mandatory before your marketplace seller account can go live.
3. Set up your marketplace seller account and complete KYC.
4. Reconcile TCS credits monthly, alongside your regular GSTR-1/3B filing.

Where Sellers Usually Get Stuck

Not the registration itself — most delays come from TCS reconciliation errors a few months in, once transaction volume picks up. Setting up the right bookkeeping habits from month one avoids a scramble later.

See our dedicated guide: GST Registration for Amazon Sellers.