If you sell on Amazon, Flipkart, or Meesho, you’ve probably read that the marketplace deducts 0.5% TCS and it “shows up as a credit” in your GST account. What almost nobody explains is what that actually looks like with real numbers — so here’s a worked example, month by month, showing exactly where the reconciliation can go wrong. Call or WhatsApp us on 70 9232 9232 if your numbers aren’t matching.
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The two documents that have to agree
GSTR-8 is filed by the marketplace (Amazon, Flipkart, Meesho), not by you — it reports the total TCS they deducted on your sales that month. Your GSTR-3B is what you file, reporting your sales and claiming the TCS credit that GSTR-8 generated. The two have to line up. When they don’t, it’s usually not fraud — it’s timing, returns, or cancellations that never got reconciled.
Worked example: a seller with ₹5,00,000 in monthly sales
Say your Amazon storefront does ₹5,00,000 in gross sales for the month. Amazon deducts 0.5% TCS — ₹2,500 — and reports it in their GSTR-8. That ₹2,500 should appear as a credit in your GST account, ready to be claimed against your output tax liability when you file GSTR-3B.
Now say ₹40,000 worth of that month’s orders were returned or cancelled after the sale but before month-end. Amazon’s GSTR-8 for the month may still show TCS calculated on the gross ₹5,00,000 (before returns), or it may already net out the returns — this depends on exactly when in the month the return was processed relative to Amazon’s own cut-off. If your own books show sales of ₹4,60,000 (net of the ₹40,000 in returns) but you claim ITC/TCS credit as if the full ₹5,00,000 figure applies, or vice versa, the two numbers stop matching — and that gap is exactly what the GST portal’s automated matching looks for.
Where the mismatch actually comes from, step by step
- Step 1: Amazon deducts TCS on the gross transaction value at the time of sale, not net of any future return.
- Step 2: A return or cancellation happens later in the same month, or in the following month.
- Step 3: Your own sales register, if properly maintained, nets this out — showing lower actual revenue than what TCS was originally calculated against.
- Step 4: If your GSTR-3B is filed straight from your invoice book without checking it against what GSTR-8 actually reported for that period, the figures diverge — sometimes by a small amount that looks negligible, but compounds every month it goes unreconciled.
Why this compounds instead of self-correcting
A single month’s small gap rarely triggers anything on its own. The pattern that draws a notice is 2-3 consecutive months where the gap keeps recurring — because that tells the system it isn’t a one-off timing difference, it’s a structural mismatch between how you’re recording sales and how the marketplace is reporting TCS. This is exactly why we check this every month for sellers we work with, rather than only looking when a notice already exists.
What to actually check every month
- Does the TCS credit showing in your GST account match what your marketplace’s GSTR-8 filing states for that period?
- Are returns and cancellations reflected in your books for the same month the marketplace processed them, not a month later?
- If you sell across multiple platforms, is each one reconciled separately, or is a mismatch on one masked by a surplus on another?
We check this every month, before filing
This reconciliation is part of what’s included in our monthly filing service for Amazon, Flipkart, and Meesho sellers — starting at ₹5,990 + GST per year for up to 30 bills a month. Call or WhatsApp us on 70 9232 9232.
Related guides
See our full GST Filing for Amazon/Flipkart/Meesho Sellers guide, and if your stock is spread across states, our Amazon FBA Multi-State Registration guide.