Library / Goods and Services Tax: The Professional's Master Guide

51. Case Study 7: E-commerce Seller on a Marketplace

51.1 Facts

Rangoli Home Decor LLP, Jaipur, Rajasthan, sells home decor goods taxed at 18% through a marketplace, ShopKart. It keeps stock in the marketplace's fulfilment centre at Bhiwandi, Maharashtra, and is registered in Rajasthan and Maharashtra. Its aggregate turnover for the previous year was Rs. 6.2 crore. In August 2026 it sent stock costing Rs. 10,00,000 from Jaipur to Bhiwandi. Sales from the Maharashtra GSTIN for August 2026 were:

Maharashtra GSTIN, August 2026	Seller books (Rs.)	ShopKart report (Rs.)
Intra-State sales (gross)	12,00,000	12,00,000
Intra-State returns	1,00,000	1,00,000
Inter-State sales (gross)	18,00,000	18,00,000
Inter-State returns	2,00,000	1,50,000
Net taxable value	27,00,000	27,50,000

A return of Rs. 50,000 received on 31 August was credited by ShopKart to the customer on 2 September. ShopKart charged commission of Rs. 3,00,000 plus GST of Rs. 54,000 on its Maharashtra invoice. Other credits for the month were Rs. 40,000 (CGST and SGST in equal halves).

51.2 Issues

Registration and the status of the two GSTINs as distinct persons.
Value of the stock transfer.
TCS under section 52, credit notes on returns and reconciliation with GSTR-8 and the settlement report.
E-invoice and e-way bill.

51.3 Analysis and computation

A person supplying goods through an operator who collects TCS must register regardless of turnover (section 24), subject only to the limited exemption for small sellers making intra-State supplies of goods, which does not help a seller with inter-State sales. Stock kept in Maharashtra makes that place a place of business, so a Maharashtra registration is needed. The two registrations are distinct persons under section 25(4), and the stock transfer is a supply under Schedule I.

Illustration 215: Value of the stock transfer

Step 1: Under rule 28, where the receiving unit is eligible for full credit, the value declared in the invoice is deemed to be the open market value (second proviso).

Step 2: The alternative for goods meant for resale is 90% of the price charged to unrelated customers. ShopKart price of the same stock is Rs. 15,00,000, so 90% would be Rs. 13,50,000.

Step 3: The Maharashtra GSTIN makes only taxable supplies and gets full credit. Rangoli declares Rs. 10,00,000 and charges IGST of Rs. 1,80,000. The Rajasthan GSTIN pays it and the Maharashtra GSTIN takes the credit.

Returns. Each return is a credit note under section 34 issued through the platform. For consumers there is no ITC to reverse, so the section 34(2) condition does not arise. For the few business buyers on the platform, the credit note reduces Rangoli's tax only when the buyer reverses the credit through IMS.

TCS on intra-State: 11,00,000 x 0.5% (CGST 0.25% + SGST 0.25%)	Rs. 5,500
TCS on inter-State as per ShopKart: 16,50,000 x 0.5% IGST	Rs. 8,250
TCS collected by ShopKart for August	Rs. 13,750

The settlement report is then reconciled to the payment received.

Collected from customers net of refunds: 27,50,000 x 118%	Rs. 32,45,000
Less: commission	Rs. 3,00,000
Less: GST on commission	Rs. 54,000
Less: GST TCS	Rs. 13,750
Less: income-tax deducted (see the companion guide on the Income-tax Act, 2025)	Rs. 2,750
Net payout received in bank	Rs. 28,74,500

The only difference between GSTR-1 and ShopKart's GSTR-8 is the Rs. 50,000 return, a timing difference. ShopKart will reduce September's value, and TCS of Rs. 250 will be adjusted then.

Illustration 216: GSTR-3B of the Maharashtra GSTIN for August 2026

Step 1: Output tax: IGST Rs. 2,88,000 on 16,00,000; CGST Rs. 99,000 and SGST Rs. 99,000 on 11,00,000.

Step 2: ITC: IGST Rs. 1,80,000 on the stock transfer; CGST Rs. 47,000 and SGST Rs. 47,000 (commission plus other credits).

Step 3: After ITC, balance: IGST Rs. 1,08,000, CGST Rs. 52,000, SGST Rs. 52,000.

Step 4: TCS of Rs. 13,750 appears once ShopKart files GSTR-8 by 10 September and Rangoli accepts it; it goes to the cash ledger (IGST 8,250, CGST 2,750, SGST 2,750).

Step 5: Fresh cash needed: IGST Rs. 99,750, CGST Rs. 49,250, SGST Rs. 49,250, total Rs. 1,98,250.

51.4 Compliance and documentation

GSTR-1 by 11 September 2026, with supplies made through the operator reported against ShopKart's GSTIN in the table meant for e-commerce supplies.
E-invoice: aggregate turnover is above Rs. 5 crore, so B2B invoices, including the stock transfer to Maharashtra, need an IRN. B2C sales through the platform do not.
E-way bill for the Jaipur to Bhiwandi stock transfer; customer consignments of lower value are covered by the courier's procedure.
A monthly three-way reconciliation: books, GSTR-1 and GSTR-8 by value, plus bank receipts to settlement reports.

Key point

Lessons

Every fulfilment centre State needs a registration before stock reaches it.

Most GSTR-1 and GSTR-8 differences are timing of returns. List them and clear them in the next month.

TCS is a cash ledger credit only after acceptance; it can be used for tax, interest and penalty.

Chapter summary

• Each warehouse State is a distinct person; stock transfer at invoice value is accepted where the receiver gets full credit.

• ShopKart collected TCS of Rs. 13,750 at 0.5% on net sales.

• The bank payout of Rs. 28,74,500 reconciles to sales less commission, TCS and income-tax deduction.

• Returns processed by the platform after the month end are the usual reconciling items.