How to setup and account for GST-TCS and TDS by Ecommerce Operators in Sales Invoices?

Hello-

Can anyone recommend the best workflow to record Sales Invoices issued by e-commerce operators such as Amazon, Flipkart etc? And consequently accounting for the GST-TCS and TDS deducted by them before transferring payments to our bank account.

Please consider the following example:
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Currently, I’m recording a Sales Invoice with a total of ₹336.00 (Row 1-4)
A Purchase Invoice is recorded for ₹106.58 (Row 8-11)
The payment receipt is recorded for ₹223.73 (Row 12)

How do I account for the TCS and TDS (Row 5-7)?
Is a Journal entry the best way to do it?

Or is there a better way? A journal entry for each transaction will be too slow and painful.

Any help is appreciated.

You can use Taxes and Charges section in Sales Invoice to record these. You may have to create separate Account for TCS etc.

If I add the amounts in Taxes & Charges, the invoice total will exceed the Order value.
I cannot even reduce the Taxable Amount, otherwise GST calculations will be impacted.

Also, TCS is not an additional tax item. Only a portion of GST already deducted before payment. Ideally, it should be added as credits to the current GST accounts.

You can create tax templates as per your accounting structure and achieve the below

To properly account for GST-TCS and TDS in ERPNext for sales through e-commerce operators like Amazon or Flipkart, follow this structured workflow:

1. Understand the Deductions:

  • TCS (Tax Collected at Source) under Section 52 of CGST Act: 1% (0.5% CGST + 0.5% SGST or 1% IGST).

  • TDS under Section 194-O of the Income Tax Act: 1% on gross sales.

These are deducted by the platform before remitting the amount to your bank.

2. Chart of Accounts Setup:

Create these accounts under Chart of Accounts:

  • TCS Receivable under GST (Asset)

  • TDS Receivable (Asset)

  • E-Commerce Platform Fees (Expense)

  • E-Commerce Commission GST Input (Asset → GST Input)

3. Create/Update Customer:

Set Amazon/Flipkart as Customer Type: Company, and mention GSTIN of the platform.

4. Create Sales Invoice:

  1. Make the invoice to the end customer (not Amazon).

  2. Use appropriate GST tax templates.

  3. Amount is gross (before TCS/TDS deductions).

  4. Mark the e-commerce platform under “E-Commerce Operator” (if customized field exists).

5. Record Payment Entry:

  1. Go to Payment Entry → “Receive”.

  2. Link it to the sales invoice.

  3. Paid Amount = Net remittance received in bank.

  4. Under Deductions:

  • Add TCS Receivable with amount deducted as TCS.

  • Add TDS Receivable with amount deducted as TDS.

This way, the invoice is fully settled, and TCS/TDS is tracked.

6. Reconcile with GSTR-8 (TCS) and 26AS (TDS):

  • Match the TCS in GSTR-8 portal filing.

  • Match TDS in Form 26AS, claim during ITR filing.

Optional: Add Automation

Use ERPNext custom scripts or workflows to automate recurring entries or reconciliation. Get professional assistance from CA or a team of professionals e.g. Setindiabiz to properly maintain your TDS & TCS for accounting for GST-TCS and TDS in ERPNext software.