TCS at 0.5% on Marketplace Sales 2026

TCS under Section 52 was 1 per cent from the introduction of the provision. It was halved to 0.5 per cent with effect from 10 July 2024 through CGST Notification No. 15/2024 and IGST Notification No. 01/2024.

Two years on, a surprising amount of published guidance, and some live service pages belonging to accounting firms, still state 1 per cent. Using the old rate in your own workings produces a reconciliation mismatch against what the platform actually collected, which is exactly the sort of unexplained difference that makes a year-end clean-up expensive.

TCS is computed on the net value of taxable supplies, not on gross despatch. Net means the aggregate value of taxable supplies made through the platform during the month, less the value of supplies returned during that month.

That definition is why returns accounting matters so much in high-return categories. A month with heavy returns produces a smaller TCS base, and where returns exceed supplies the net value can even be negative, which carries forward.

The dependency is worth noting: nothing appears until the operator files. If your GSTIN was recorded incorrectly on the platform, the credit goes nowhere and the fix is with the operator, not with the portal.

The operator collects the tax and deposits it, then files GSTR-8 by the 10th of the following month.

Once GSTR-8 is filed against your correct GSTIN, the amount surfaces for you on the GST portal.

Open the TCS and TDS credit received statement, check the figures against your own settlement workings, and accept the entries.

The accepted amount moves into your electronic cash ledger.

Use it to offset output tax in GSTR-3B, or claim a refund where it accumulates faster than your output liability.

It is 0.5 per cent of the net taxable value of supplies, split as 0.25 per cent CGST plus 0.25 per cent SGST for intra-state supplies, or 0.5 per cent IGST for inter-state supplies. This has been the position since 10 July 2024, when the earlier 1 per cent rate was halved.

No. It is your own tax, prepaid on your behalf by the platform, and it belongs on the balance sheet as a recoverable asset until it reaches your electronic cash ledger. Booking it as an expense both overstates costs and guarantees that the credit is never claimed.

The most common reason is that the operator has not yet filed GSTR-8 for the period, since nothing surfaces before that. The next most common is an incorrect or outdated GSTIN on the marketplace account, in which case the credit has been reported against the wrong number and the correction has to be made with the operator.

Yes. TCS is computed on net value, meaning supplies made through the platform during the month less supplies returned during that month. Heavy returns reduce the base, and this is one of several reasons returns must be recognised in the month they occur rather than whenever a credit note is processed.

Yes. Where accepted TCS credit in the electronic cash ledger consistently exceeds your output tax liability, it can be claimed as a refund rather than left to build up indefinitely. This is common for sellers in lower-rated categories or with a substantial share of zero-rated export sales.