GST TCS (Section 52) and TDS 194-O for E-commerce Sellers: Tally Guide

E-commerce sellers on platforms like Amazon, Flipkart, Meesho, and Myntra face a dual statutory deduction on every settlement: GST TCS (1%) under Section 52 of the CGST Act and Income Tax TDS (0.1%) under Section 194-O. Understanding these deductions and recording them correctly in Tally is critical for accurate financial statements and tax compliance.

1. GST TCS Under Section 52

E-commerce operators collect GST TCS at the rate of:

• Intra-state sales: 0.5% CGST + 0.5% SGST = 1% total.
• Inter-state sales: 1% IGST.

The TCS is collected on the net value of taxable supplies (excluding customer returns). The collected TCS is credited to the seller's GST Electronic Cash Ledger by the 10th of the following month. Sellers can use this credit against their output GST liability.

2. Income Tax TDS Under Section 194-O

Section 194-O mandates:

• Deductor: E-commerce operator (Amazon, Flipkart, etc.).
• Rate: 0.1% on gross sales value (if PAN is provided); 5% if no PAN.
• Threshold: Applicable when seller's annual sales through the platform exceed ₹5 lakh.
• Credit: Reflected in the seller's Form 26AS and Annual Information Statement (AIS).

3. Tally Ledger Setup for TCS and TDS

• "GST TCS Receivable — Amazon" / "GST TCS Receivable — Flipkart" — under Current Assets (or Duties & Taxes).
• "TDS Receivable u/s 194-O — Amazon" / "TDS Receivable u/s 194-O — Flipkart" — under Current Assets.

4. Recording the Settlement Deductions

In the settlement journal voucher, include deductions for both TCS and TDS:

5. Reconciliation with GST Portal and AIS

• At month-end, verify GST TCS credits in your GST Electronic Cash Ledger on the GST portal against the amounts booked in Tally.
• Download your Annual Information Statement (AIS) from the income tax portal and match 194-O TDS credits against your Tally balances.
• Any differences must be investigated and reconciled before filing quarterly TDS returns.