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In India, the seller generally pays GST on a taxable sale made through a marketplace. The e-commerce operator may also have to collect tax at source (TCS) on qualifying sales, but that collection is normally credited to the seller; it does not replace the seller’s GST liability. The main exception is a service specifically notified under Section 9(5) of the CGST Act, for which the operator pays GST as if it were the supplier.
Who pays GST when you sell on a marketplace?
For an ordinary taxable supply made by a third-party seller, the seller is the person making the underlying supply. If registered and liable, the seller generally accounts for GST on that supply, issues the required invoice and files its applicable returns. The marketplace’s role in facilitating an order does not, by itself, make it responsible for the seller’s full output GST.
India’s GST rules distinguish that seller-side liability from the operator’s possible Section 52 TCS obligation. The distinction is reflected in the CBIC Sectoral FAQs and the Central Goods and Services Tax Act.
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Seller and operator responsibilities
| Question | Seller / actual supplier | E-commerce operator |
|---|---|---|
| Who makes the underlying marketplace supply? | Generally, the third-party seller that supplies the goods or service. | Generally, facilitates the supply through its digital or electronic platform. |
| Who accounts for GST on an ordinary taxable supply? | Generally, the seller, subject to registration status, supply type and applicable exceptions. | Not merely because it operates the marketplace or collects Section 52 TCS. |
| Who may collect Section 52 TCS? | The seller does not collect the operator’s Section 52 TCS on its own sale. | The operator, when the statutory conditions apply to qualifying supplies by other suppliers. |
| Who files the relevant seller return or operator statement? | The seller files its applicable returns, depending on its registration and circumstances. | The operator files the prescribed statement for its Section 52 collections, when applicable; current forms and deadlines should be checked against current rules. |
CBIC defines an e-commerce operator as a person who owns, operates or manages a digital or electronic facility or platform for electronic commerce. The legal treatment depends on the transaction structure, not just the platform’s branding.
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When does the operator collect TCS?
Section 52 concerns net taxable supplies made through an operator by other suppliers where the operator collects the consideration, subject to the Act and applicable notifications. It is not a blanket charge on every online order or every platform transaction. The operator reports qualifying supplies and collections through its prescribed statement.
TCS is a collection and reporting mechanism, not payment of all GST due on the sale. CBIC’s Frequently Asked Questions on TCS, dated 30 November 2018, explains that deposited TCS is reflected in the registered actual supplier’s electronic cash ledger and may be used to discharge that supplier’s tax liability. The FAQ also describes how returned supplies affect net taxable supplies. Check current portal instructions and rules before relying on specific filing procedures.
What rate applies?
Section 52 sets a maximum TCS rate of one per cent, with the actual rate prescribed by notification. CBIC’s 30 November 2018 FAQ lists historical rates, but those dated figures should not be assumed to be current. The currently effective notified rate and its effective date are not established here; verify them in the applicable current notification before calculating a transaction.
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Section 9(5) is a specific exception for categories of services notified by the Government. When a notified service is supplied through an e-commerce operator, the operator pays the GST and is treated as the supplier liable for tax in relation to that service. CBIC’s Sectoral FAQs state that this applies “only in case of services notified under Sec. 9(5) of the CGST Act, 2017.”
This exception should not be generalized to goods, all services, or every transaction placed through a platform. Confirm that the particular service and transaction fall within an applicable notification before treating the operator as the taxpayer.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Registration is a separate question
Who pays GST on a supply and whether a seller must register are related but distinct questions. CBIC guidance describes compulsory-registration rules for some suppliers selling through operators required to collect TCS, as well as an exception for certain service suppliers under a notification. Registration outcomes can depend on the seller’s supply, location, turnover, notification and other facts.
Do not rely on turnover thresholds or exceptions quoted in an older FAQ without checking the current law and notifications. The operator can have its own registration and reporting obligations. The CBIC GST FAQs provide official background, but a seller should confirm the current rules that apply to its particular business.
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Cases where the general answer may not fit
- The platform sells on its own account: A platform that is the seller in the transaction is not necessarily acting as a marketplace operator for that sale. CBIC guidance distinguishes own-account sales from supplies by other suppliers for Section 52 purposes.
- The operator does not collect consideration: Section 52’s collection conditions matter; do not assume TCS applies solely because an order was placed through a platform.
- The service is notified under Section 9(5): The operator, rather than the underlying service supplier, is liable to pay tax for that notified service.
- Registration, composition, cross-border or agency facts are involved: These can affect which rules apply, so the ordinary marketplace explanation may not resolve the transaction.
How a seller can check a marketplace transaction
- Identify the supplier: Determine whether you or the platform made the underlying supply, rather than relying only on the platform name.
- Check the supply type: Establish whether it is a taxable supply and, for a service, whether it is specifically notified under Section 9(5).
- Check the consideration flow: Find out whether the operator collects the customer’s consideration and whether the sale is by another supplier through the operator, as relevant to Section 52.
- Separate the amounts: Distinguish GST charged on the underlying supply from any Section 52 TCS withheld or collected by the operator.
- Review your account records: If registered, check whether reported TCS has appeared in your electronic cash ledger, then reconcile it with marketplace statements and applicable returns.
- Verify current requirements: Confirm the applicable registration position, notified rate, statement or return requirements, and deadlines under current law and portal instructions.
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