Amazon TCS and TDS Accounting in Tally: Seller's Guide
Two separate deductions quietly shave every Amazon payout: GST tax collected at source (TCS) and income-tax TDS. Both are recoverable, both are frequently mis-booked, and confusing one for the other is among the most common errors CAs find in marketplace sellers' books. Here is how each works and how to structure the Tally ledgers so credits never leak.
GST TCS under section 52 — the 0.5% deduction
As an e-commerce operator, Amazon must collect TCS under section 52 of the CGST Act on the net value of taxable supplies made through it. The rate is 0.5% — split as 0.25% CGST plus 0.25% SGST on intrastate supplies, or a single 0.5% IGST on interstate supplies. In the settlement flat file these appear as rows with amount-descriptions like TCS-IGST, TCS-CGST, and TCS-SGST.
The collected amount is not a cost. Amazon deposits it against your GSTIN; it surfaces on the GST portal, where you accept it through the TDS/TCS credit received facility, after which it lands in your electronic cash ledger and can pay your output liability. Timing of acceptance and set-off is a compliance detail your CA should confirm for your filing calendar.
Income-tax TDS under section 194-O — the 0.1% deduction
Separately, section 194-O of the Income-tax Act requires e-commerce operators to deduct TDS at 0.1% of gross sales facilitated through the platform. This is an income-tax credit, not a GST item: it should appear in your Form 26AS / AIS against your PAN and offsets your income-tax liability at return time. Limited exemptions exist for certain small individual or HUF sellers — whether you qualify is a question for your CA, not a default to assume.
TCS vs TDS at a glance
| GST TCS (s.52) | Income-tax TDS (s.194-O) | |
|---|---|---|
| Rate | 0.5% (0.25%+0.25% intra / 0.5% IGST inter) | 0.1% on gross |
| Law | CGST/IGST Acts | Income-tax Act |
| Where credit appears | GST portal, electronic cash ledger after acceptance | Form 26AS / AIS |
| Recovered against | GST output liability | Income-tax liability |
| Ledger nature in Tally | Current asset (TCS receivable) | Current asset (TDS receivable) |
Ledger setup and entries in Tally
Create two current-asset ledgers: GST TCS Receivable (Amazon) and TDS Receivable u/s 194-O (Amazon). Then, when booking each settlement:
- Book gross collections and fee deductions per the settlement rows.
- Debit GST TCS Receivable for the TCS rows (keep IGST/CGST/SGST components identifiable — separate ledgers or bill-wise references both work).
- Debit TDS Receivable for the 194-O deduction.
- The net receipt against the bank should now equal the settlement deposit exactly.
On acceptance of TCS on the portal, a journal moves the amount from the receivable into your GST cash-ledger tracking, ready for set-off. Reconciling the receivable ledger against portal figures monthly catches missed or excess TCS early — mismatches do happen, typically from refund-heavy months where Amazon's TCS adjustments lag your credit notes.
Getting the entries created automatically
Because TCS and TDS rows sit inside the settlement flat file alongside dozens of fee lines, hand-picking them each cycle is tedious. TallySutra's Amazon to Tally import classifies TCS-IGST, TCS-CGST, TCS-SGST, and TDS rows to the right receivable ledgers automatically, keeps the receipt voucher balanced to the paise, and its settlement reconciliation confirms the deductions tie back to the orders they came from. For the broader compliance picture — returns, registrations, and portal workflows — see the Amazon seller GST compliance guide. And since both provisions carry entity-specific nuances, treat this article as accounting mechanics, and let your CA confirm the tax positions before filing.
A worked example to make the mechanics concrete
Take a single interstate order with a taxable value of Rs 10,000. GST TCS under section 52 at 0.5% comes to Rs 50, collected as IGST because the supply is interstate; had the same order been intrastate, the identical Rs 50 would arrive as Rs 25 CGST plus Rs 25 SGST rows. Separately, 194-O TDS at 0.1% is computed on the gross sales amount — on this order, a figure in the vicinity of ten to twelve rupees depending on the base Amazon applies. The right habit is to book the exact figures from the settlement rows rather than recomputing, then verify at month level: your TCS receivable movement should approximate half a percent of net taxable supplies for the period, and TDS should approximate a tenth of a percent of gross. When the monthly ratio drifts noticeably from those benchmarks, something structural changed — a surge of refunds, a reporting gap, or rows landing in the wrong ledger — and the drift is your earliest warning. Small per-order amounts compound: across a year of steady volume, unclaimed TCS and TDS quietly become a meaningful interest-free loan to the exchequer that a ten-minute monthly reconciliation would have recovered.
Frequently asked questions
Is Amazon's TCS a cost I should expense?
No. Both GST TCS and 194-O TDS are advance recoveries of your own future tax liabilities, so they belong on the balance sheet as current assets, not in the profit and loss account. Expensing them understates profit and forfeits the visibility needed to claim them. The only sense in which they cost you anything is cash-flow timing.
Why doesn't my TCS credit on the GST portal match my books?
The usual causes are timing and refunds: Amazon deposits TCS by its own calendar, and TCS adjustments for refunds may post in a later period than your credit notes. Reconcile monthly between the TCS receivable ledger, the settlement rows, and the portal statement, and carry a documented list of period-crossing items. Persistent gaps need your CA's attention.
Do TCS and TDS apply on the GST-inclusive or exclusive amount?
They are computed on different bases under different laws — GST TCS on the net value of taxable supplies under section 52, and 194-O TDS on the gross amount of sales. In practice you should not recompute either: book exactly what the settlement report shows, then verify the portal and Form 26AS agree. Ask your CA to confirm base-value questions for your specific situation.
TallySutra turns Amazon, Flipkart and Meesho reports into reconciled, reviewed TallyPrime vouchers — duplicate-safe, with every rupee traceable to its source row.
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