GST Guide 2025 for those selling on online marketplaces like Amazon, Flipkart, Meesho

admin 05-07-2025

In today's digital era, selling your product through platforms like Amazon, Flipkart, Meesho, or JioMart has become quite popular. But when it comes to GST (Goods and Services Tax), many online sellers get confused. If you are also wondering whether it is necessary to take GST or how much tax you should charge - then this blog is for you.

This is the latest guide of 2025 which will tell you step-by-step how GST works in online selling, on whom it is applicable, and how you can run your business smoothly and legally.

What is GST and why is it important for online sellers?

GST is an indirect tax which is levied on the sale of every goods or service. Earlier there were different taxes like VAT, Service Tax, Excise Duty, but now only one tax – GST – is applicable by combining all of them.

If you are selling your product on any e-commerce website, then you will have to follow the rules of GST.

Why GST is necessary:

· Online platforms like Amazon or Flipkart do not allow sellers without GST.

· You will get the input tax credit on your purchases only after GST registration.

· You can face a penalty and even suspension from the platform for not complying with GST.

Is it mandatory to take GST for online selling?

Yes, if you are selling products through Amazon, Flipkart, Meesho, or any online platform, then taking GST registration is compulsory, even if your turnover is less than 40 lakh.

Why do we have to take GST?

Under Section 24 of the GST Law, marketplace sellers have not been given a turnover threshold.

Without GSTIN your product will not be listed on any e-commerce site.

Online platforms deduct TCS (Tax Collected at Source) from your sales, for which it is necessary to have GSTIN to take credit.

That is why GST registration has to be done from the very first day.

Which documents are required for GST Registration?

Some basic documents are required to get GSTIN:

· PAN Card (of business or proprietor)

· Aadhaar Card

· Bank account proof – Cancelled cheque or bank statement

· Business address proof – Rent agreement or electricity bill

· Photograph – of Proprietor or Director

· Digital Signature (DSC) – required for Private limited or LLP

After registration, you get a unique GSTIN number which can be obtained within 7 days if the documents are correct.

How does GST work on Amazon, Flipkart, Meesho?

In case of online selling, GST is applied in several ways:

1. You have to charge GST on every sale

When you sell a product to a customer, you have to charge GST on the invoice.

2. Marketplace deducts TCS from you

Platforms like Amazon, Flipkart deduct 1% TCS on your sales, which is deposited to the government.

Example: If you sell a product worth 10,000, then Amazon will deduct 100 (1%) TCS.

3. You can take credit of TCS

The amount of TCS will be visible on your GST portal, which you can adjust in your monthly return (GSTR-3B).

GST Rates for Online Products – Common Categories

Online sellers have to apply GST rate according to the HSN code of their product. Some common categories are given below:

Clothes (up to 1000) – 5%
Footwear (up to 1000) – 5%
Mobiles & Electronics – 18%
Beauty Products – 18%
Books – 0% (exempted)
Grocery Items – 0%–5%

It is important to use the correct rate, otherwise you may get a notice.

How to do Invoicing and GST Return Filing?

A. Things to keep in mind while making an invoice:

· Seller and buyer's GSTIN

· Product's HSN Code

· GST rate and breakup (CGST + SGST or IGST)

· Invoice number, date, and total amount

B. Monthly GST Returns:

GSTR-1 - Details of sales of every month

GSTR-3B - Tax summary and payment form

C. Annual Return:

· If your turnover is more than ?2 crore, then you have to file GSTR-9.

· If you file late, then you will have to pay penalty and interest.

What is the rule of GST on Delivery Charges and Commission?

A. GST on Delivery Charges

If you charge the customer for delivery, GST is applicable on that too, at the same rate as applicable on the product.

B. GST on Platform Commission

Platforms like Amazon, Flipkart charge you commission. GST is applicable on those services too. You can take Input Tax Credit for that.

C. Reverse Charge Mechanism (RCM)

In some cases you have to pay GST under RCM, especially if the platform is unregistered. It is better to consult a CA.

2025 Latest GST Rules for Online Sellers

Some new rules have come in 2025 which online sellers will have to follow:

· Multi-Factor Authentication (MFA) has become mandatory for GST portal login.

· E-invoicing is mandatory for those with turnover more than ?5 crore.

· ITC (Input Tax Credit) rules have now become strict – invoice wise matching is required.

· Penalties on non-compliance have increased.

If it is not mandatory to follow all these rules, then penalties can be received.

What will happen if GST is not taken?

If you do not register for GST or do not file returns, then:

· Your Amazon/Flipkart seller account can be suspended

· You can be penalized up to ?10,000

· You cannot take Input Tax Credit

· GST department can send you a notice or take legal action

How can CA Firm help Online Sellers?

A professional CA firm can help you with all these:

· GST Registration (single or multi-state)

· GSTR-1, GSTR-3B filing on monthly basis

· TCS and ITC reconciliation

· E-invoicing and RCM implementation

· Responding to GST notices

· Making the business audit and compliance ready

· Grow your business, and we will handle the stress of GST.

FAQs – Quick Answer

Q1. Can I sell on Amazon without GST?

No. Amazon, Flipkart, Meesho all platforms make GSTIN mandatory.

Q2. What is TCS in GST?

Marketplace deducts 1% TCS on every sale, which you can claim.

Q3. Is it necessary to levy GST on turnover less than 20 lakh?

Yes, turnover limit does not apply for online selling.

Q4. What if GST return is not filed?

Penalty, interest, and seller account can be suspended.

Q5. Where can I get help?

From an experienced CA firm that has full experience of GST for online sellers.

Conclusion

Online selling can be quite profitable, but GST compliance is mandatory. If you are selling on Amazon, Flipkart, or Meesho, then GST registration, invoicing, return filing must be done properly.