For an ordinary taxable sale by a third-party seller on an Indian marketplace, the seller generally remains responsible for GST on the sale and its seller-side return obligations. The marketplace may have a separate duty to collect Tax Collection at Source (TCS) under Section 52 of the CGST Act, when the legal conditions apply. That TCS is credited to the supplier; it is not payment of the seller’s full GST bill. The main exception is a service specifically notified under Section 9(5), for which the e-commerce operator pays the tax as though it were the supplier.
Who pays GST when you sell on a marketplace?
In the usual marketplace arrangement, the seller makes the underlying supply to the customer. The seller generally accounts for the GST applicable to that supply, issues the required seller invoice, and handles its applicable returns, subject to registration status, the type of supply and any relevant exception. The platform’s collection of money or TCS does not, by itself, transfer those seller obligations to the platform.
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This is the general rule under India’s central GST framework for a platform facilitating sales by other suppliers. It does not automatically cover a platform selling goods on its own account, an agency arrangement, cross-border transactions, or every service sold through an app. The transaction structure and applicable provisions matter. See the CBIC Sectoral FAQs and the CGST Act text.
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| Question | Seller / actual supplier | E-commerce operator |
|---|---|---|
| Who makes the underlying supply? | Generally, the third-party seller makes the supply to the customer. | Usually facilitates the transaction when acting as a marketplace; its role differs if it sells on its own account. |
| Who accounts for GST on an ordinary taxable sale? | Generally the seller, subject to the law, registration status and supply facts. | Not merely because it hosts the sale or collects TCS. |
| Who may collect TCS? | The seller does not collect Section 52 TCS from itself. | The operator, when Section 52 conditions apply to qualifying supplies by other suppliers and it collects the consideration. |
| Who files the relevant seller-side returns? | The seller handles applicable returns according to its registration and circumstances. | The operator has its own statement and remittance duties for TCS where required. |
| Who pays tax on a notified Section 9(5) service? | Not the party liable under the special rule for that notified service. | The operator pays GST as if it were the supplier liable for that service. |
What marketplace TCS means—and what it does not
Section 52 concerns the net value of qualifying taxable supplies made through an operator by other suppliers where the operator is responsible for collecting the consideration, subject to the Act and applicable notifications. The operator collects and reports TCS under that mechanism. It is separate from the GST liability on the underlying sale.
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CBIC guidance explains that TCS deposited by the operator is reflected in the registered actual supplier’s electronic cash ledger and may be used to discharge that supplier’s tax liability. A seller should therefore reconcile the operator’s reported collections with the ledger rather than treat TCS as an automatic settlement of all GST due. Returns can affect the net taxable supplies used in the calculation; the detailed operational procedures should be checked against current portal instructions.
Do not assume an old TCS percentage is current
The CGST Act text sets a ceiling of one per cent for Section 52 TCS, with the actual rate to be notified. CBIC’s TCS FAQ, dated 30 November 2018, lists historical rates of 0.5% under each relevant central and state or union-territory Act for intra-State supplies and 1% under IGST for inter-State supplies. That dated FAQ does not establish that those percentages remain effective today. Check the current notification before applying a rate; the currently effective rate and date are not established by the cited materials here. See the CBIC FAQ on TCS.
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When the operator pays GST under Section 9(5)
Section 9(5) is a specific exception, not a general rule for online sales. The Government may notify categories of services for which the e-commerce operator pays tax when the service is supplied through it. For a service within a notified category, the operator is treated as the supplier liable to pay tax in relation to that supply. The CBIC Sectoral FAQ states: “Yes, but only in case of services notified under Sec. 9(5) of the CGST Act, 2017. In such cases tax shall be paid by the electronic commerce operator if such services are supplied through it and all the provisions of the Act shall apply to such electronic commerce operator as if he is the supplier liable to pay tax in relation to the supply of such services.”
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Do not extend this treatment to goods, every service offered through a platform, or a service merely because the platform handles payment. Confirm that the specific service and transaction fall within a current notification before deciding who is liable.
Marketplace sales versus a platform’s own sales
Platform branding alone does not settle the GST question. Section 52 is relevant to supplies made by other suppliers through an operator where the operator collects consideration. CBIC’s FAQ distinguishes these from sales a person makes on its own account through its own website, for which the FAQ says Section 52 TCS is not required on that basis. Identify who is actually selling and supplying the goods or services, and whether the platform is facilitating another supplier’s sale or making its own supply.
Registration is a separate question
Whether the seller must register for GST is not answered simply by deciding who bears the tax on a particular sale. 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 2017 notification. The applicable result depends on current law, notifications, the state, supply type and seller facts.
CBIC’s FAQ pages also contain historical threshold figures. Because those figures may be outdated, do not rely on them as current registration limits without checking the governing provisions and notifications. An operator has its own registration obligations, distinct from the seller’s registration analysis. The CBIC GST FAQ is a starting point, but confirm current requirements before acting.
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A practical check for sellers
- Identify the supplier. Confirm whether you or the platform makes the underlying supply, rather than relying on the platform’s name or checkout flow.
- Classify the supply. Determine whether it is goods or services, whether it is taxable, and whether a notified Section 9(5) service rule applies.
- Check the payment flow. Establish whether the operator collects the consideration and whether the Section 52 conditions for TCS apply.
- Verify registration and rates. Check current registration provisions, notifications and the notified TCS rate for the relevant transaction and date.
- Reconcile records. Compare marketplace statements with your sales, returns and the TCS credit shown in your electronic cash ledger; use current portal rules for forms and deadlines.
These distinctions concern India’s GST framework, including the CGST Act. IGST and state or union-territory provisions, notifications, and the details of a transaction can affect the result. The cited CBIC Act copy’s amendment status is not established here, so verify current law and obtain professional advice for a specific liability or filing decision.
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