ONDC Seller GST: Registration, TCS and Returns Explained
For GST, selling on ONDC works much like selling on a marketplace. You generally need a GSTIN, an e-commerce operator collects 0.5% TCS on your net sales, and you report the sales in GSTR-1, including Table 14. The difference is that two apps sit in each order, and CBIC has said which one collects the TCS.
- ONDC is a network, not a shop. You join through a seller app, which ONDC calls a Seller Network Participant.
- Circular 194/06/2023-GST of 17 July 2023: where the seller app is not itself the seller, the seller app that pays you collects the TCS. The buyer app does not.
- Where the seller app is itself the seller, the buyer app collects TCS when it pays.
- TCS is 0.5% of net taxable sales in total. The central half has been 0.25% since Notification 15/2024-Central Tax of 10 July 2024.
- Registration is compulsory for sellers through an operator that collects TCS, unless you qualify for the enrolment-number route for sales within one State.
In this guide
How does an ONDC order actually flow?
On Amazon one company runs the shopfront, takes the money and pays you. On ONDC those jobs are split. A buyer shops in a buyer app, such as a payments or shopping app. Your products reach that buyer through your seller app, which lists your catalogue on the network and passes the money on to you.
ONDC describes two kinds of seller apps. A Marketplace Seller Node hosts many sellers and holds no stock of its own. An Inventory Seller Node is run by a seller selling its own goods. Most small sellers join a marketplace seller node. Both apps are e-commerce operators under section 2(45) of the CGST Act, so the obvious question is: which one takes the TCS?
Who collects the TCS?
| Situation | Who collects TCS | Source |
|---|---|---|
| You sell through a seller app that is not itself the seller. The buyer app takes payment, keeps its fee and passes the rest to the seller app | The seller app, when it releases payment to you. The buyer app does nothing under section 52 for that sale | Circular 194/06/2023-GST, issue 1 |
| The seller app is itself the seller (its own stock) | The buyer app, when it pays that seller | Circular 194/06/2023-GST, issue 2 |
| Payment flows another way, for example straight to the seller app | Not covered in so many words. Ask your seller app in writing and check your TCS credit | No direct clarification found |
The rule in plain words: TCS sits with the operator who finally hands the money to the real seller. TCS means tax collected at source. The operator holds back 0.5% of your net taxable sales, pays it to the government and reports it in its own monthly return, GSTR-8. You then get it as a credit.
The simplest check is on the portal. Your TCS credit screen shows the GSTIN of the operator that reported your sales. That is the operator you deal with for ONDC sales.
Do you need GST registration?
Section 24(ix) makes registration compulsory for anyone supplying goods or services through an operator that must collect TCS. So the default answer is yes.
There is one exception for goods. Notification 34/2023-Central Tax, in force from 1 October 2023, lets a seller below the registration limit sell through an e-commerce operator with only an enrolment number. The conditions: no inter-State sales, sales through operators in only one State, a PAN, and the enrolment taken before the first sale. Whether a given seller app accepts sellers on an enrolment number is the app's own decision. Our guide to selling without GST explains the route.
Food and restaurant sellers are a separate case. For restaurant services booked through an app, the law makes the operator pay the GST. Which app does that on ONDC is a question for your CA before you start.
A worked example
Kiran sells packaged spices from Coimbatore through a marketplace seller app on ONDC. The buyer app collects payment and remits to the seller app, which pays Kiran. GST on her goods is taken as 5% for this example, and the app fees are assumed.
| Line | Amount |
|---|---|
| Orders shipped: taxable Rs 1,20,000 plus GST Rs 6,000 | Rs 1,26,000 |
| Less: returns, taxable Rs 8,000 plus GST Rs 400 | Rs 8,400 |
| Less: buyer app and seller app fees (assumed) | Rs 5,000 |
| Less: GST on those fees at 18% (assumed) | Rs 900 |
| Less: GST TCS, 0.5% of net taxable Rs 1,12,000 | Rs 560 |
| Less: income tax TDS, 0.1% of Rs 1,20,000 (base taken for illustration) | Rs 120 |
| Payout from the seller app | Rs 1,11,020 |
In her GSTR-1 Kiran reports Rs 1,12,000 of net taxable sales in her B2C tables, and the same Rs 1,12,000 in Table 14 against the seller app's GSTIN. She does not report the payout. She claims the Rs 560 TCS on the portal, the Rs 900 GST on fees as input tax credit if the invoices carry her GSTIN, and the Rs 120 TDS in her income tax return. See how to claim TCS credit.
On TDS: CBDT's Circular 20/2023 is widely reported to apply the same idea to section 194-O, so the app that makes the final payment to you deducts it. The rate is 0.1%. More in TDS 194-O for online sellers.
Returns, step by step
- Download the monthly sales report from your seller app, with invoice numbers, buyer States, HSN codes and returns.
- Report the sales in your B2B and B2C tables, the HSN summary and the documents issued table, exactly as for any marketplace.
- Fill Table 14 with one row for the operator that collected TCS, using its GSTIN, the net value and the tax.
- Accept the TCS credit after the operator files GSTR-8, so it reaches your cash ledger.
- Pay through GSTR-3B, using the TCS in the cash ledger and credit on the app fees.
The mistake people usually make
The common mistake is assuming ONDC is not e-commerce, so there is no TCS and no Table 14. It is e-commerce, and both apps are operators. The second is reporting the same sales twice in Table 14, once against the buyer app and once against the seller app. Only the operator that collected TCS goes there. If your Table 14 and the operator's GSTR-8 do not match, expect a question. Read GSTR-8 vs GSTR-1 mismatch before one arrives.
Sources
- CBIC Circular 194/06/2023-GST: TCS with multiple e-commerce operators (GST Council copy) (checked 13 Nov 2026)
- ONDC: Seller Network Participants, marketplace and inventory seller nodes (checked 13 Nov 2026)
- Notification 15/2024-Central Tax: central TCS rate 0.25% (checked 13 Nov 2026)
- Notification 34/2023-Central Tax: enrolment number route for small sellers through operators (checked 13 Nov 2026)
- CGST Act, updated to 30 September 2020: sections 2(45) and 24 (CBIC) (checked 13 Nov 2026)
- ONDC: guidance on tax (site did not load)
How AprilTax can help
If you sell on Amazon, Flipkart or Meesho as well as ONDC, the marketplace side can be prepared for you. AprilTax has a free GSTR-1 tool for online sellers: upload those sales reports and it prepares the GSTR-1 tables, runs about 30 checks and matches the TCS your marketplaces reported. You upload the JSON file on the GST portal yourself.
Frequently asked questions
Do I need GST registration to sell on ONDC?
Who deducts GST TCS on ONDC, the buyer app or the seller app?
What is the TCS rate on ONDC sales?
Which GSTIN do I put in Table 14 for ONDC sales?
Is income tax TDS deducted on ONDC sales?
Do ONDC sales go in a different GSTR-1 table from marketplace sales?
I sell food on ONDC. Does the same apply?
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