Where you sell changes what you owe and who collects it. A seller listing on a marketplace and the same seller running their own checkout face materially different GST mechanics, and moving from one to the other mid-year is where reconciliation problems start.
On a marketplace: someone else collects a slice
E-commerce operators are required to collect tax at source on the net value of taxable supplies made through them, and deposit it against your GSTIN. It then appears in your electronic cash ledger for you to claim.
Two things follow. First, the marketplace's monthly statement has to be reconciled against your own sales records — returns, cancellations and adjustments mean the two rarely match on the first pass. Second, that collected amount is your money sitting with the department until you claim it, which is a cash flow consideration if marketplace volume is large.
The rate has been revised, so check the current figure rather than relying on a number from an older article.
On your own site: all of it is yours
Selling through your own checkout means no operator is collecting anything on your behalf. You charge, collect and remit the full amount yourself. Simpler in one sense — no third-party statement to reconcile — but nothing is withheld and reported for you either, so the record-keeping burden sits entirely in your system.
This is why the e-commerce platform itself matters for compliance and not just for conversion. It needs to produce a tax invoice with the required particulars, apply the right rate per item, and determine place of supply from the delivery address rather than the billing address.
Place of supply follows the goods
For goods, place of supply is generally where delivery terminates. A Bihar seller shipping to Maharashtra charges IGST; shipping within Bihar charges CGST and SGST. The customer's billing address is not the determining factor.
Any checkout that decides tax from billing address alone will produce wrong invoices for every gift order and every customer whose card is registered elsewhere. Test this specific case before launch: billing in one state, delivery in another.
Returns are where systems fall apart
A return is not just a refund. It needs a credit note, linked to the original invoice, reflected in the right return period. When a return crosses a month or quarter boundary, the adjustment lands in a later period than the sale.
Platforms that treat a refund as a payment-gateway operation and nothing more leave the tax position to be corrected by hand. For a business doing meaningful return volume this becomes the largest recurring compliance task.
Other things to configure before launch
- Rates per item, not per store. A catalogue spanning categories will span rates. A single store-wide rate is wrong the moment the catalogue diversifies.
- Shipping charges. How these are taxed when bundled with goods needs deciding, not defaulting.
- Discounts. Pre-invoice discounts and post-sale discounts are treated differently. Coupon logic should reflect that.
- Registration thresholds. The turnover threshold that applies to ordinary suppliers may not apply the same way to those supplying through an e-commerce operator. Check your position before assuming you are below it.
- Certain services through an operator. For some notified service categories the operator, not the supplier, is liable to pay. This matters if your platform intermediates services rather than selling goods.
The reconciliation that decides whether this is manageable
Every month: platform statement against your own sales, payment gateway settlement against both, and returns matched to credit notes. If the e-commerce system cannot export in a shape that supports that three-way comparison, the work falls on a person — and it is the kind of work that gets skipped until it becomes a year-end problem.
GST rates, turnover thresholds and reporting windows change. Verify the current position on the GST portal or with your tax advisor before making a decision based on this.
About the author. Kislay Chandan has worked with schools since 2014. Rather than gathering requirements from the outside, he worked inside a school to see what actually goes wrong day to day, and built what he found into the software. He still works with Shemrock Glitters in Patna — most changes to the product start with something that came up there.
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