You sold ₹10 lakh on a marketplace last month, but only ₹8.3 lakh reached your bank. Your GST return must still show the full ₹10 lakh of sales, less genuine returns. The gap is normal. The problem is when nobody explains it.
Where the money goes
- Commission and fees. Referral fees, fulfilment, shipping, storage and payment gateway charges are deducted before payout. The marketplace invoices you for these with GST, which you can claim as input tax credit.
- TCS under GST. The marketplace collects tax at source on your net taxable sales and deposits it. It shows up in your GST portal and can be used against your tax liability once accepted.
- TDS under income tax. A small TDS is deducted on gross sales. It appears in your Form 26AS and is claimed in your income tax return.
- Returns and cancellations. Customer returns reduce your sales, but they may fall in a different month from the original sale.
- Reserves and timing. Some amounts are held back and released later, so a payout rarely matches a single month of sales.
The reconciliation that fixes it
Each month, start from the marketplace's sales report, not the bank credit. Match gross sales and returns to your GSTR-1. Match the TCS figure the marketplace reports with what appears on the GST portal. Then match the settlement report to the bank, line by line, with fees, TCS, TDS and reserves explaining the difference.
Common mistakes
- Reporting the bank credit as sales, which understates turnover
- Not claiming credit on commission and fee invoices
- Forgetting to accept TCS credit on the portal
- Missing GST registration in a state where the marketplace stores your stock
A monthly reconciliation pack takes these issues off the table before they become notices.
This article is general information, not advice for your situation. Tax rules change, so speak to us before acting on it.