Key takeaways
What this article covers, in order:
- Do I need GST to sell online?
- What is TCS, and who files GSTR-8?
- The rates and codes are product-specific
- Worked example: Meera's home-décor store in Jaipur
- The headaches nobody warns you about
- Free or Pro? Let's be real about order volume
Your settlement report from the marketplace says you sold ₹4.2 lakh last month, your bank got ₹3.6 lakh, and somewhere in between there's commission, shipping, returns and a line called "TCS". Online sellers have a GST life that's a bit different from a regular shop's. If you're registered as a regular taxpayer, HelloBooks can file your GSTR-1 and GSTR-3B for one GSTIN free, directly to the GST portal. Whether the free plan is enough depends on your order volume, and we'll be honest about that below.
Do I need GST to sell online?
For goods, the default answer is yes, from the first rupee. Section 24 of the CGST Act makes registration compulsory for anyone supplying goods through an e-commerce operator that collects TCS, whatever their turnover.
There's one carve-out worth knowing about. Since 1 Oct 2023, a small seller whose turnover is under the normal threshold can sell goods through a marketplace without a GSTIN by taking an enrolment number on the GST portal. The catch is that you can only sell within your own state, only on platforms in one state, and you need a PAN. The platform won't collect TCS from you. That suits a home baker or a small craft seller in their own city, not anyone shipping across India.
For services sold through a platform, the regular threshold of ₹20 lakh (₹10 lakh in the special category states) generally applies. The exception is the specific services where the platform itself pays the GST under Section 9(5), such as cab rides and restaurant food delivery.
Composition sellers can sell goods online too, but only within their state. And composition returns aren't something HelloBooks files.
What is TCS, and who files GSTR-8?
When a customer pays the marketplace, the platform keeps a slice of your sale value as Tax Collected at Source (TCS). Since 10 Jul 2024, the rate has been 0.5% of the net taxable value of your supplies through that platform (taxable sales minus returns). That's 0.25% CGST plus 0.25% SGST for sales within your state, or 0.5% IGST for inter-state sales.
The platform files GSTR-8 every month. You don't. GSTR-8 is the operator's return listing what was sold through it and how much TCS it collected against each seller's GSTIN.
Your part is to accept the TCS credit on the GST portal. Once you accept it, the money lands in your electronic cash ledger, and you use it to pay your GST like any other cash. Two things to understand here. First, TCS is not input tax credit; it's cash already paid on your behalf. Second, if you don't accept it, it just sits there while you pay your full tax out of the bank.
The rates and codes are product-specific
There's no single "e-commerce rate". You charge whatever your product's HSN attracts. After the GST 2.0 changes on 22 Sep 2025, most everyday products sit at 5% or 18%, with 40% for a small set of luxury and sin goods.
| What you sell | Commonly falls at |
|---|---|
| Packaged foods, many personal-care items | 5% |
| Apparel and footwear, by price band and HSN | 5% or 18%, check the threshold |
| Electronics accessories, home appliances | 18% |
| Handicrafts and many handmade items | 5% (check HSN) |
Apparel and footwear rates depend on the sale value per piece, and those bands changed in 2025, so check them for your price points. Use the HSN/SAC lookup and the CBIC notifications. Then make sure the HSN in your marketplace listing matches the one on your invoices. Mismatches show up in reconciliation.
The marketplace's own charges, like commission, fulfilment fees, shipping and advertising, are services billed to you at 18%. These are ITC for you, provided the platform's invoice carries your GSTIN.
Worked example: Meera's home-décor store in Jaipur
Meera sells on two marketplaces and files monthly. Here's Oct 2026 (illustrative):
| Amount | |
|---|---|
| Gross sales through marketplaces, 5% items (taxable value) | ₹4,00,000 |
| Customer returns in the month | ₹40,000 |
| Net taxable sales | ₹3,60,000 |
| Output GST at 5% | ₹18,000 |
| TCS collected by marketplaces (0.5% of ₹3,60,000) | ₹1,800 |
| Marketplace commission, fulfilment and ads | ₹70,000 + ₹12,600 GST |
| Stock purchased from registered suppliers (5%) | ₹2,00,000 + ₹10,000 GST |
Her ITC is ₹12,600 + ₹10,000 = ₹22,600, which is more than her output tax of ₹18,000. So she owes no cash GST this month and carries ₹4,600 of credit forward. The ₹1,800 of TCS she accepts sits in her cash ledger for a later month, or she can eventually seek a refund of excess cash balance.
That's a common pattern for online sellers. Marketplace fees carry 18% while the products carry 5%, so credits often outrun output tax. It's worth tracking month to month.
GSTR-1 for Oct 2026 is due 11 Nov 2026 and GSTR-3B 20 Nov 2026. The operators' GSTR-8 for Oct 2026 is due on 10 Nov 2026, so the TCS should be visible to you before your own due dates.
The headaches nobody warns you about
Returns and RTOs. Every return should reduce your output tax, either through a credit note or by netting it in the period. Report them properly, or you'll pay GST on sales you didn't keep.
Warehouses in other states. If you send stock to a marketplace fulfilment centre in another state, that place usually needs to be on your registration in that state. That means another GSTIN under the same PAN, and each one files its own returns. Stock transfers between your own GSTINs are taxable supplies, and moving goods usually needs an e-way bill.
Three reports that never quite match. Your sales as per the marketplace, as per GSTR-8, and as per your books will differ because of timing, cancellations and returns. Reconcile them at least quarterly. Differences between GSTR-8 and your GSTR-1 can draw a notice.
The 3B lock. Since the Jul 2025 tax period, the liability that GSTR-1 pushes into GSTR-3B can't be edited in 3B. If you forgot a batch of returns in GSTR-1, fix it through GSTR-1A before filing 3B.
Free or Pro? Let's be real about order volume
HelloBooks Free allows 200 transactions a year. A seller doing 20 orders a day goes past that in about ten days if every order is entered individually.
Free can still work in a couple of situations. One is a new or small seller doing a few orders a week. Another is a seller who posts a monthly settlement summary per marketplace (sales, returns, fees, TCS) instead of order-level entries, with a modest number of supplier bills. Anything beyond that, and you'll want Pro at ₹499/month.
Pro also solves the multi-state problem. It covers every GSTIN of one legal entity, so a Rajasthan GSTIN plus a Karnataka or Haryana warehouse GSTIN under the same PAN all sit in one subscription. It includes e-way bills and e-invoicing for when your turnover crosses the e-invoice threshold, and GSTR-9 generated ready to file. See the pricing page and our e-way bill guide.
How HelloBooks helps
HelloBooks files GSTR-1 and GSTR-3B directly to the GST portal from inside the app. That's for one GSTIN on Free, and every GSTIN of your entity on Pro. GSTR-2B reconciliation checks that the marketplace's commission invoices and your suppliers' bills are actually there before you claim them. Razorpay and Cashfree payouts can be reconciled, and marketplace settlements arrive through bank statement import. If you're late on GSTR-3B, the portal's own interest and late fee figure is shown before you file. Your CA can be invited into the same books, which helps at reconciliation time.
To be clear about scope, HelloBooks doesn't file GSTR-8. Only the marketplace files that.
FAQs
Do I need GST registration to sell on Amazon or Flipkart?
For goods, generally yes, regardless of turnover. A small seller selling only within their own state can instead use a GST portal enrolment number, under conditions.
What is the TCS rate on e-commerce sales?
0.5% of net taxable value since 10 Jul 2024. Before that, it was 1%.
Do I file GSTR-8?
No. The e-commerce operator files GSTR-8. You accept the TCS credit on the GST portal, and it goes into your cash ledger.
Can I use TCS to pay my GST?
Yes. Once accepted, it's in your electronic cash ledger and pays tax like cash.
Is HelloBooks Free enough for an online seller?
For a small seller or one who posts monthly settlement summaries, it can be. Higher-volume sellers, or those with warehouses in several states, will need Pro.
Do I need a GSTIN in every state where my stock sits?
Usually, yes, when your goods are stored at a fulfilment centre in that state. Confirm your setup with a CA.
Get the TCS acceptance and the returns reconciliation into a monthly rhythm, and online selling GST stops being a mystery line on your settlement report.
Start free — GST filing included, no card. Try HelloBooks Free
