What is GST TCS under Section 52, and how much is deducted?
Section 52 of the CGST Act makes an e-commerce operator (Amazon, Flipkart, Meesho and similar) collect tax at source from what it pays you. Since 10 July 2024 the rate is 0.5% of the net taxable value of your supplies: 0.25% CGST plus 0.25% SGST for intra-state sales, and 0.5% IGST for inter-state sales (Notification 15/2024-Central Tax cut the CGST and SGST rates from 0.5% each to 0.25% each).
"Net taxable value" means the taxable supplies you made through the platform in the month, less the value of goods returned in that month, worked out separately for each GSTIN. TCS is not an extra tax on you. It is an advance deposit of your own GST, held against your GSTIN.
Who files GSTR-8, and when?
The operator, not you. It files Form GSTR-8 and deposits the TCS by the 10th of the month after the month of collection. GSTR-8 lists each seller's GSTIN with the gross and net value collected on.
Your job starts after that: checking that what the operator reported matches your own sales data.
How does the TCS credit reach your electronic cash ledger?
The operator's GSTR-8 data shows up on your side as TCS credit received. According to the GST portal's own user guide, you need to act on each record under Services > Returns > TDS and TCS credit received: select the period, accept or reject every line (a remark is mandatory for rejections), and then file the statement. The guide says accepted amounts are credited to your electronic cash ledger only after you file. The portal does not let you file while rows are still pending, and the filing steps changed slightly from September 2025 (a "generate summary" step before filing). Menu labels do move around, so follow what you see on your own login.
The credit lands under the matching tax head: CGST and SGST for intra-state sales, IGST for inter-state sales. A CGST balance cannot pay IGST or SGST, which is why a seller selling mostly in one direction can end up with a lopsided balance.
How can you use GST TCS credit?
TCS credit is not input tax credit. It sits in the cash ledger, not the credit ledger. Under Section 49(3) of the CGST Act, the cash ledger can be used to pay tax, interest, penalty, fees or other amounts under the Act, so in principle it can cover output tax, interest and a late fee, each within its own head. Most sellers simply let it offset the tax payable in GSTR-3B.
- If you owe tax each month: TCS credit reduces the cash you pay.
- If your tax is mostly paid from ITC: TCS keeps piling up in the cash ledger.
What happens to unused TCS credit?
It does not lapse. The balance stays in your cash ledger and carries forward until you use it or claim it back. To get it back, the GST portal has a refund category called "Excess balance in electronic cash ledger", filed through the refund application (RFD-01). Section 49(6) lets balances in the cash ledger be refunded under Section 54. The two-year time limit in Section 54 does not apply to a refund of excess balance in the electronic cash ledger; CBIC clarified this in Circular No. 166/22/2021-GST. You can keep the balance for future tax, but a large idle balance is money you could claim back.
Keep your reconciliation papers ready, because the tax officer may ask how the balance arose. Check the current refund steps on your portal login before filing.
What if the operator reports your TCS wrongly?
Do not accept a line you cannot match to your own sales. Reject it with a remark, and tell the marketplace's seller support or tax team which order period and amount look wrong. Per the portal guide, rejected records flow back to the operator's GSTR-8 for amendment, and the corrected entry appears for you in a later period. Once the operator amends, act on the latest version, not the old one.
Common causes of mismatch include sales and returns falling in different months, the wrong GSTIN or state on the report, and cancelled orders still counted. Returns and cancellations lower the net value, so TCS should fall with them. If returns in a month exceed sales, the excess is ignored and does not carry forward, according to the GST Council's TCS FAQs, so a month with heavy returns can still show some TCS.
How is income-tax TDS different from GST TCS?
They are two separate deductions on the same payout, and they are claimed in different places.
| GST TCS | Income-tax TDS | |
|---|---|---|
| Law | Section 52, CGST Act | Section 393(1), Income-tax Act 2025 (earlier Section 194-O), from 1 April 2026 |
| Rate | 0.5% of net taxable value (since 10 July 2024) | 0.1% of gross sales |
| Where you see it | GST portal, TCS credit received, then electronic cash ledger | Your tax credit statement (Form 26AS or its replacement under the new Act) and AIS |
| How you use it | Pay GST or claim a cash ledger refund | Claim as tax paid in your income tax return |
TDS is nil for resident individuals and HUFs whose total sales through the platform stay within ₹5 lakh in the year, provided PAN or Aadhaar is on record. The ₹5 lakh relief applies only to the income-tax deduction, not to GST TCS.
How should you reconcile TCS every month?
- Download the marketplace's monthly tax or settlement report for your GSTIN after the 10th (when GSTR-8 is due).
- Compare net taxable value (sales minus returns, state-wise) with your GSTR-1 figures.
- Recalculate TCS: 0.25% plus 0.25% intra-state, 0.5% inter-state.
- Open the TCS credit received screen on the portal and match each line to your calculation.
- Accept the matches, reject the differences with a remark, and file the statement so the credit reaches the cash ledger.
- Raise rejected lines with the marketplace in writing and check the amended entry next month.
- Track the cash ledger balance each quarter and decide whether to set it off or claim a refund.
What we'd check in your case
Before suggesting anything, we would look at your GSTIN setup, whether you sell on more than one marketplace, how much of your TCS goes to which tax head, how large your unused cash balance really is, and whether your monthly records match the operator's GSTR-8 data. If you need help with registration or filings, see our GST registration service or our guide to selling on Amazon without GST. Send us your last two months of marketplace reports on WhatsApp and we will tell you plainly whether the numbers add up.
Not sure how this applies to you? Tell us what you sell and where. We'll tell you what you need, and what you don't, in a free 15-minute fit check.
Ask on WhatsAppRelated questions
Does unused GST TCS credit expire?
No. Unused TCS credit stays in your electronic cash ledger until you use it or claim a refund under the category 'excess balance in electronic cash ledger'. The two-year limit in Section 54 does not apply to this refund (Circular 166/22/2021-GST).
Can I use GST TCS credit to pay income tax?
No. GST TCS sits in your GST cash ledger and can only be used for amounts payable under GST law. The 0.1% income-tax TDS is a separate deduction claimed in your income tax return.
Why does the TCS on my GST portal not match my Amazon or Flipkart report?
Usual causes are returns or cancellations falling in a different month, wrong state or GSTIN details, or the operator reporting a different net value. Reject the line with a remark and ask the marketplace to amend it in a later GSTR-8.
Is TCS the same as input tax credit?
No. Input tax credit comes from GST you paid on purchases and sits in the electronic credit ledger. TCS credit sits in the electronic cash ledger, which is why it can be refunded in a way ITC usually cannot.
Who pays the GST TCS to the government, me or the marketplace?
The marketplace. It deducts TCS from your payout, files GSTR-8 and deposits the amount with the government by the 10th of the next month. You only see it as a credit once it is reported against your GSTIN.
See our service: GST registration for online sellers →
Sources
- GST Portal user guide: TDS and TCS credit received
- GST Council: FAQs on TCS (Section 52)
- Notification 15/2024-Central Tax (10 July 2024)
- GST Portal user guide: Application for refund (excess balance in electronic cash ledger)
- CGST Act Section 49 text (secondary reproduction)
- TDS on e-commerce under Section 393(1) (secondary)
General information based on rules as of November 2026, not legal or tax advice for your specific case. Rules change; we confirm what applies to you before any filing.