GST for Shopify Sellers in India: TCS, E-Invoicing and What to Set Up in Your Store

GST for Shopify sellers in India comes down to three things: register correctly (usually from day one if you ship across states), understand that TCS under Section 52 applies to marketplace sales rather than your own Shopify store, and generate e-invoices for B2B orders once your turnover crosses Rs 5 crore. In the store itself, you need correct tax rates, HSN codes and a GST invoicing app, because Shopify does not issue compliant invoices on its own.

Everything below reflects the rules as of September 2026. GST changes often and depends on your facts, so please confirm your setup with your chartered accountant before acting on it.

• Pan-India shipping generally means compulsory GST registration.
• Marketplaces collect 0.5% TCS on your sales through them; your own Shopify store does not trigger TCS in the usual setup.
• E-invoicing covers B2B invoices above Rs 5 crore aggregate turnover; the 30-day reporting limit applies at Rs 10 crore and above.
• Configure Shopify taxes, HSN codes and an invoice app, then reconcile monthly.

Registration: when a Shopify seller needs a GSTIN

Section 24 of the CGST Act lists people who must register regardless of turnover. It includes anyone making inter-state taxable supplies and people supplying goods through e-commerce operators who are required to collect tax at source (see the CBIC text of Section 24). In practice, a D2C brand shipping from Delhi to customers in Mumbai or Bengaluru is making inter-state supplies, so it generally needs a GSTIN from its first sale.

There is one relaxation for very small marketplace sellers. From 1 October 2023, Notification 34/2023-Central Tax allows suppliers below the registration threshold to sell goods through e-commerce operators without registering, provided they make no inter-state supplies and meet other conditions. This rarely suits a growing Shopify brand, but it is worth knowing.

TCS under Section 52: who collects it and when

Section 52 requires every e-commerce operator (not acting as an agent) to collect tax on the net value of taxable supplies made through it by other suppliers, where the operator collects the consideration (CBIC text of Section 52). "Net value" means your supplies through the platform in a month minus returns in that month.

The current rate

The Act caps the rate at 1%. Following the 53rd GST Council meeting, the effective rate was cut from 1% to 0.5% from 10 July 2024: 0.25% CGST plus 0.25% SGST or UTGST for intra-state supplies, or 0.5% IGST for inter-state supplies. The central tax change was made through Notification 15/2024-Central Tax, which amended Notification 52/2018-Central Tax. We found no further change to the rate as of September 2026.

Does TCS apply to my own Shopify store?

In the usual setup, no. On your Shopify store you are the supplier, you sell your own goods, and your payment gateway or courier remits the money to you. Shopify provides software; it does not sell your goods on your behalf or collect your sales consideration as a marketplace does. Shopify's India GST page also makes clear that GST registration and compliance remain the merchant's responsibility (Shopify Help Center).

TCS becomes relevant when you also sell on Amazon, Flipkart, Myntra, Nykaa or similar marketplaces. Then:

1. The marketplace deducts TCS from your payouts.
2. It files GSTR-8 and the amount appears on your GST portal.
3. Once accepted, the TCS credit reaches your electronic cash ledger, where you can use it against output tax.
4. You reconcile the marketplace's TCS statement with your own sales and returns every month.

Marketplaces also deduct income-tax TDS on payouts, which is a separate regime. If your arrangement is unusual, for example a platform that collects payment on your behalf, ask your CA whether it counts as an e-commerce operator.

E-invoicing: thresholds and deadlines as of September 2026

A lower threshold has been discussed publicly, but we could not find any notified reduction below Rs 5 crore as of September 2026. Treat any claim otherwise as unconfirmed until you see a CBIC notification.

For a Shopify brand, e-invoicing mostly affects B2B orders: corporate gifting, bulk orders from retailers, or any buyer who gives you a GSTIN at checkout. Route these orders to a system that can generate the IRN and QR code, such as your accounting software or a GST invoicing app connected to the Invoice Registration Portal.

GST rates after the September 2025 rationalisation

The 56th GST Council meeting reduced the main structure to two rates, 5% and 18%, plus a 40% special rate for luxury and sin goods, effective 22 September 2025 (PIB). The old 12% and 28% slabs no longer apply to most goods. If your Shopify tax overrides or accounting stock items were created before then, check each product's HSN and rate against the current rate notifications or the GST portal's rate search.

What to set up in your Shopify store

1. Turn on tax collection for India in your Shopify tax settings and decide whether prices include tax. Shopify supports tax-inclusive pricing, where it charges the listed price and works out the tax portion, which is what Indian shoppers expect.
2. Check the default rates. Shopify applies CGST plus SGST for intra-state sales and IGST for inter-state sales, with an 18% default. Set up overrides for products taxed at other rates using collections, as Shopify's India GST page describes.
3. Add HSN codes. Shopify stores these in the HS tariff code field in each product's shipping section and expects at least six digits. Store shorter codes in metafields if your invoice app reads them from there.
4. Install a GST invoicing app or connect your accounting system. Shopify states it does not create GST-compliant bills. Your invoice must show your GSTIN, invoice number series, HSN, taxable value, tax split and place of supply.
5. Capture buyer GSTIN for B2B orders with a checkout field or company details, so those orders can be invoiced and e-invoiced correctly.
6. Decide how shipping and COD charges are taxed with your CA, and configure them consistently in Shopify and your accounts.
7. Plan credit notes for returns and RTOs. Every refund against an issued invoice needs a matching credit note in your books.

Monthly compliance routine for a Shopify seller

• Export Shopify sales, refunds and cancellations and reconcile them against invoices issued.
• Split sales by state for place-of-supply reporting in GSTR-1. From July 2025, auto-populated liability in GSTR-3B for certain inter-state supplies became non-editable, with corrections routed through GSTR-1A, so accurate GSTR-1 data matters more than ever.
• Reconcile marketplace TCS and payout reports if you sell on marketplaces.
• Match gateway settlements and COD remittances to orders.
• Check that consignments needing an e-way bill (generally above Rs 50,000 in value under Rule 138, with some state-level variations for intra-state movement) have one; see the e-way bill portal FAQ.

If your books live in Tally, our guide to the Shopify automation stack shows where GST data fits in a wider finance workflow.

Common GST mistakes Shopify brands make

• Charging one rate across a mixed catalogue instead of product-level overrides.
• Issuing Shopify order confirmations as if they were tax invoices.
• Missing credit notes for RTOs and refunds, which inflates reported sales.
• Ignoring marketplace TCS credit sitting unused on the portal.
• Assuming the e-invoicing threshold is based on the current year only; it looks at every financial year from 2017-18.

Automate GST so compliance stops eating your month

Most GST errors in D2C come from data moving by hand between Shopify, marketplaces and accounting software. TNM builds GST automation for Indian Shopify brands: correct tax mapping, invoice generation, B2B e-invoicing routes and monthly reconciliation reports your CA can file from. See our GST automation service, and keep your CA involved in every configuration decision.