194-O TDS vs GST TCS: the Two Tax Deductions on Your Marketplace Payout, Compared

Two different taxes can be held back from the same marketplace sale. Section 194-O is income tax TDS at 0.1% of gross sales, applied from 1 October 2024. GST TCS under section 52 of the CGST Act is 0.5% of net taxable sales, applied since 10 July 2024. Each has its own return and its own route to get the money back. As of November 2026, that is the whole difference in one line; the table below sets it out.

194-O TDS and GST TCS side by side

The 194-O column is from ClearTax and Taxguru. The TCS column is from the GST Council's FAQ and a CBIC notification summary. The FAQ dates from 2018 and shows the old rate; the 0.5% figure is from notification 15/2024-Central Tax.

Which tax law does each belong to?

194-O sits in income tax. The e-commerce operator deducts it at the earlier of crediting your account or paying you. Read the detail in TDS under section 194-O.

GST TCS sits in GST. Section 52 makes the operator collect a notified percentage of the net value of taxable supplies made through it, where it collects the money. CBIC's explainer says TCS has similarities with TDS, but is collected by the operator on supplies made through its portal. Full guide: GST TCS on marketplace sales.

Worked example: one month of sales

Say your gross sales through a marketplace in a month are ₹5,00,000 and customers return goods worth ₹50,000 in the same month. Assume everything is taxable, you are above the ₹5 lakh limit, and PAN is on file. The base used here is a simplification; each deduction has its own base rules and your marketplace's report is the final word.

The numbers are ours, to show the method. The FAQ confirms that TCS is on sales net of same-month returns, and the 194-O base is described as the gross sales amount. Whether GST is inside the gross amount for 194-O is not stated in the sources we opened, so the real TDS figure on your payout may differ. Try the TCS part in the GST TCS calculator.

How do you get each one back?

GST TCS. After the operator files GSTR-8, the TCS is credited to your electronic cash ledger under the matching head. You use it when you pay your GST liability, and may claim a refund of an excess balance under section 54(1). Steps: claim TCS credit in GST.

194-O TDS. The operator files Form 26Q and issues Form 16A; you claim the credit in your income tax return. If your tax for the year is lower than TDS, the excess is refunded after the return is processed.

You cannot use one against the other. Income tax TDS cannot pay GST, and GST cash ledger credit cannot pay income tax.

What do the two have in common?

More than the rates suggest.

Both are collected by the marketplace, not by you. Both are advance tax rather than a cost. Both are normally visible in the marketplace's monthly tax or settlement report, though report names differ by platform and sit inside the seller portal. Both reduce the cash in your bank on settlement day. Both can be wrong if your PAN, GSTIN or state details are wrong. If you suspect either is wrong, gather the settlement ID, the order dates and the report line before you contact support.

What goes wrong with each?

With TCS. The operator's GSTR-8 is matched against your GSTR-1. A vendor summary of section 52 says unresolved differences can increase the supplier's output liability, with interest. The summary is not official text, so read the Act with your accountant. The usual causes are missed sales in your GSTR-1, wrong state, a second GSTIN, or a delayed GSTR-8. If you spot a GSTR-1 error before GSTR-3B, see GSTR-1A.

With 194-O. The usual causes are a missing or wrong PAN, which means 5% instead of 0.1%, a mismatch between the PAN the marketplace reports and your own, or a seller who is above the limit but has not told the marketplace. The credit appears only if the operator files Form 26Q correctly.

A monthly routine for both

1. After the 10th, check that the TCS for last month has reached your GST cash ledger.
2. Compare the TCS and TDS lines in the marketplace's tax report with your sales and returns.
3. Note any gap and raise a ticket with the marketplace in the same week.
4. Keep the TDS lines for your income tax return; keep the cash ledger entries for GSTR-3B.
5. Each quarter, ask your accountant to check the totals against Form 16A and the GST portal.

This is our suggested routine, not an official procedure.

What else is on a payout besides TDS and TCS?

Referral fee, closing fee, shipping or logistics charges, ads charges if you use them, and GST on those fees. For how they stack, see Amazon seller fees in India and Flipkart seller fees explained. Keep the fee lines separate from the two tax lines when you reconcile.

This page is general information, not tax or legal advice; confirm with a chartered accountant or GST practitioner.

FAQ

Is 194-O TDS the same as GST TCS? No. 194-O is income tax TDS at 0.1%; GST TCS is 0.5% under section 52 of the CGST Act. They have different returns, bases and credit routes.

Can both be deducted on the same order? Yes, both are set up to apply to marketplace sales, subject to their own conditions: 194-O has a ₹5 lakh limit for small individual sellers, while TCS is not collected on exempt supplies.

Which is higher, TDS or TCS? TCS at 0.5% is five times 194-O TDS at 0.1% on a like-for-like base. The bases differ, because TCS is on net sales and 194-O on gross sales.

Where do I claim TDS and where do I claim TCS? TDS goes into your income tax return, supported by Form 16A. TCS appears in your GST electronic cash ledger and is used against GST payable.

Do I need a PAN for both? A PAN or Aadhaar avoids the 5% 194-O rate. For TCS you need a GSTIN, because every seller of goods through an operator must be registered.

Why did a blog say 1% for both? Both rates were 1% until they were cut: TCS on 10 July 2024 and 194-O on 1 October 2024. Older posts and the 2018 GST FAQ show the old rate.

Next step

Tax lines are one part of a payout; fees, returns and adjustments are the rest. Blooprint's Amazon account management team works with sellers on reading and reconciling marketplace settlements.