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:
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.
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.
Set Amazon/Flipkart as Customer Type: Company, and mention GSTIN of the platform.
4. Create Sales Invoice:
Make the invoice to the end customer (not Amazon).
Use appropriate GST tax templates.
Amount is gross (before TCS/TDS deductions).
Mark the e-commerce platform under “E-Commerce Operator” (if customized field exists).
5. Record Payment Entry:
Go to Payment Entry → “Receive”.
Link it to the sales invoice.
Paid Amount = Net remittance received in bank.
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.