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TCS and TDS are not marketplace fees. Booking them as fees hides money you can claim
Two deductions in every marketplace settlement are taxes collected on your behalf, recoverable in full. Put them in the commission bucket and a 10% channel reads as 11%, and the credit is never claimed.
Open any Flipkart, Amazon or Meesho settlement and two lines appear alongside the commission: TCS and TDS. They look like fees, sit next to fees, and most spreadsheets total them with fees. They are not fees.
| Levy | Law | Rate | On what | How you get it back |
|---|---|---|---|---|
| TCS | CGST section 52 | 1% (0.5% CGST + 0.5% SGST intra-state; 1% IGST inter-state) | Net taxable value of supplies through the operator | Appears in GSTR-2A/2B from the marketplace's GSTR-8; claim it as credit in your GST return |
| TDS | Income-tax section 194-O | 0.1% | Gross sales through the operator; individuals and HUFs under ₹5 lakh a year with PAN are exempt | Appears in Form 26AS; credited against your income-tax liability |
What mis-booking costs
A channel charging 10% commission reads as 11% once TCS is added to the fee line, and 11.1% with TDS. Two things follow. The channel's unit economics look worse than they are, so pricing and the decision to stay on a channel are made on the wrong number. And the credit, which is real money, is only recovered if someone matches the marketplace's GSTR-8 to your 2B and claims it; a fee line is never claimed.
How to book them
- Record TCS and TDS as receivables against the marketplace, per settlement, not as expenses.
- Reconcile TCS monthly against GSTR-2B. A marketplace that under-reports in GSTR-8 leaves credit you cannot claim; that is a dispute with them, visible only if you check.
- Keep the TDS figure per financial year for the income-tax return, and check it against Form 26AS before filing.
ezmarketplaces records both as recoverable credit, per channel and per period, and a test in the payments module fails if either is ever bucketed with fees. GSTR-2A/2B matching against the marketplace's GSTR-8 is on the roadmap and is not claimed yet.