Taxes for e-commerce sellers in India

If you have a running e-commerce business from marketplaces like Amazon, Flipkart etc, please be aware of various taxes that are applicable to your business. There is much hype about GST tax, but there are many other taxes that you should be aware of as a business owner.

1. TDS on ecommerce sales : As per Section 194O of IT Act, E-Commerce operators like Amazon, Flipkart etc should deduct TDS @1% at the time of credit of the amount of sale of goods, services, or both to the account of an e-commerce participant or at the time of making payment to an e-Commerce participant by any other mode, whichever is earlier. If you are not selling through marketplace but sell directly through your online store then this tax is not applicable.
2. TCS on ecommerce sales : The dealers or traders supplying goods and/or services through e-commerce operators like Amazon, Flipkart etc will receive payment after deduction of TCS @ 1%. The rate is notified by the CBIC in Notification no. 52/2018 under CGST Act and 02/2018 under IGST Act. This tax can be adjusted with your due GST tax. If you are not selling through marketplace but sell directly through your online store then this tax is not applicable.
3. GST on sale of goods : You need to pay a Goods and Sales Tax of 5% to 18% on sale of goods through ecommerce (except for Exempted products)
4. TDS for contractors / courier services : You will need to deduct TDS to your contractor / courier and advertising partners and deposit it with Government Authority. Rate of TDS from payments made to any contractor will be 1% or 2% of the gross payment or, as the case may be, of the net payment.
5. Yearly Income Tax : You need to pay applicable Income tax based on Net Income / Profit once a year to IT Authorities. TDS deducted under Section 194O will be adjusted with this tax.

You are required to adhere to all taxation rules. Any delay in paying taxes or filing returns can lead to penalties or interest or both.

Above mentioned taxes may not be a comprehensive list of taxes applicable to your business. You should always consult a CA for professional advice.