Regulatory
TCS and TDS for online sellers: what the marketplace holds back
By Sylvr Founder's Desk · Last checked 6 Nov 2026
A marketplace holds back 0.5% of each sale's net taxable value as tax collected at source (TCS) under GST, and 0.1% of gross sales as TDS under section 194-O of the Income-tax Act. Neither is a fee: both are tax collected on your behalf, and you claim TCS back against your GST. Source: Gazette (on gstcouncil.gov.in), read 6 Nov 2026; Gazette (copy on gst.kar.nic.in), read 6 Nov 2026; incometaxindia.gov.in, read 4 Nov 2026.
The rates
Source: Gazette (on gstcouncil.gov.in), read 6 Nov 2026; Gazette (copy on gst.kar.nic.in), read 6 Nov 2026; incometaxindia.gov.in, read 4 Nov 2026.
| What | Rate | Split |
|---|---|---|
| TCS under GST (s.52) | 0.5% | 0.25% CGST + 0.25% SGST within a state, or 0.5% IGST between states |
| TDS under s.194-O | 0.1% | On gross sales |
On one order (Example)
A ₹799 order with GST at 18%: the taxable value is ₹677, so 0.5% TCS is about ₹3. You claim it back against your GST, so it is not a cost. Source: Gazette (on gstcouncil.gov.in), read 6 Nov 2026.
Sources
Every figure above is here. A page with a figure and no source here does not publish.
- sell.amazon.in/fees-and-pricing, read 4 Nov 2026. Open the source ↗
- sellerzone.tatacliq.com/faces/commons/sellerAgreement.jsp, read 4 Nov 2026. Open the source ↗
- gstcouncil.gov.in/sites/default/files/2024-09/central-tax-15-2024-11072024.pdf, read 6 Nov 2026. Open the source ↗
- gst.kar.nic.in/Documents/NOTIFICATIONS/Igstact0115724.pdf, read 6 Nov 2026. Open the source ↗
- incometaxindia.gov.in/w/section-61-96, read 4 Nov 2026. Open the source ↗
Questions founders ask
Is TCS a fee?
No. It is tax collected on your behalf. It shows as a credit you set against your own GST, so the planner shows it outside your profit.