Should you sell goods online in India, on Amazon, Flipkart, Meesho, or even your own website, you have most certainly heard about online sales tax. Still, many home businesses and small vendors find themselves perplexed about it. Rest assured, this guide will simplify the explanation of online sales tax.
The Online Sales Tax:
When you sell goods or services over the internet in India, you must pay an online sales tax. Currently, we use the Goods and Services Tax (GST) system. Technically, then, online sales tax is just GST applied to your online sales.
Should your online sales call for GST payment?
Indeed, GST rules apply whether you sell online. You have to register for GST—even if your sales are modest.
- Get GST paid by consumers (should your goods or services be taxable).
- Quarterly or monthly file GST returns.
If you sell through an e-commerce site such as Amazon or Flipkart, there is no exemption threshold. GST is required even if your income falls less than ₹20 lakhs annually.
Who gathers the online sales tax?
It depends:
- If you sell from your own website, you have to gather and pay GST straight forwardly.
- Should you sell on a marketplace such as Flipkart, the platform records TCS (Tax Collected at Source) and deducts it.
You still must, however, routinely file GST returns.
In online sales, what is TCS?
Sites like Amazon and Meesho report 1% TCS deducted from your sales to the government. Your online sales tax record includes this, which you can claim upon filing your returns.
For illustration:
- Assume you sold a 12% GST ₹1,000 item online.
- The GST gathered is ₹120.
- Platform might charge ₹10 (1%) as TCS.
- You have ₹990.
- You adjust the TCS credit and file returns.
Documents You Require for GST Registration Certificate Online Sales Tax Filing
- GST details on a sales invoice.
- TCS comments from the market.
- Bank records and sales reports.
- Form for monthly GST returns: GSTR-1 and GSTR-3B.
Advice to Remain Compliant:
- Before launching web sales, get your GST number.
- Use billing tools to include accurate GST.
- Timely file GST returns to help prevent fines.
- Track TCS lost by different platforms.
- If you sell across several states, ask a CA.
Final Thoughts:
In India, e-commerce mostly consists of online sales tax. Although initially, it may seem difficult, managing taxes becomes simple once you grasp GST and TCS. Whether your business is full-time online, a house entrepreneur, or a small vendor—following the tax laws helps you grow legally and peacefully.
File on time, keep current, and concentrate on sales; the rest will come together.
