Does the marketplace deduct the right TDS on an NRI seller?

Often not. Section 194-O, the 0.1% marketplace TDS, applies only to a resident seller. As a non-resident you are outside it, and your TDS should be under Section 195. Platforms default to 194-O for everyone, so it usually has to be corrected.

Do I have to register for GST?

Yes. A seller of goods through a marketplace must register for GST regardless of turnover, with no small-seller exemption, and a non-resident registers as a non-resident taxable person. GST registration is required from your first sale.

Is the GST collected by the marketplace the same as the TDS?

No, they are separate. The marketplace collects a small GST tax at source, now 0.5%, which is a GST mechanism, while the income-tax TDS is a different tax. Both can apply to the same sale.

Is my Indian marketplace income taxable in India?

Yes, as Indian business income arising through a business connection, on your profit, subject to your treaty and whether you have a permanent establishment in India.

Special Income

Selling on an Indian e-commerce marketplace as an NRI

You have Indian business income and must register for GST, but the marketplace TDS everyone cites does not apply to you.

You sell goods into India through a marketplace like Amazon India or Flipkart while living abroad, and you want to understand the tax. Selling on an Indian platform brings Indian business income, and GST that you cannot avoid with the usual small-seller thresholds. But there is a non-resident twist on the income-tax withholding that the marketplaces themselves often get wrong. Here is how an NRI marketplace seller is taxed, on both income tax and GST.

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Last reviewed: 26 July 20266 min readReviewed by Preetesh Maloo, CA

The short answer

Selling goods through an Indian marketplace gives you Indian business income, taxable in India where it arises from a business connection, subject to your treaty. On the income-tax withholding, the marketplace TDS everyone cites, Section 194-O at 0.1%, applies only to a resident seller, so as a non-resident you are outside it, and TDS on payments to you falls under Section 195 instead. On GST, a seller of goods through a marketplace must register regardless of turnover, there is no small-seller exemption, and a non-resident registers as a non-resident taxable person; the operator also collects a small GST tax at source, now 0.5%. Income tax and GST are separate.

References on this page

Selling goods through an Indian marketplace gives Indian business income (business connection, Section 9)
Section 194-O TDS (0.1%) is resident-only; a non-resident seller's TDS is under Section 195
GST registration is mandatory for a marketplace goods seller regardless of turnover; a non-resident registers as a non-resident taxable person
The marketplace also collects GST at source, now 0.5%; income tax and GST are separate

Indian business income, and the TDS the marketplace gets wrong

Selling goods into India through a marketplace means you have Indian business income, because the sales arise through a business connection in India under Section 9, taxed on your profit and subject to your country's treaty and whether you have a permanent establishment here.

The withholding is where the marketplaces trip up. Everyone points to Section 194-O, under which a marketplace deducts a small TDS, now 0.1%, on a seller's sales. But that section applies only to an e-commerce participant who is resident in India; a non-resident seller is outside it entirely. So the marketplace should not be deducting 194-O on you, and TDS on payments to you, as a non-resident, falls under Section 195 instead. In practice the platforms' systems default to 194-O for everyone, so an NRI seller often has the wrong TDS applied, which then has to be untangled and reconciled. Getting the right section on from the start avoids that.

GST you cannot avoid, and it is separate

GST is a separate tax and, for a marketplace seller of goods, unavoidable. Normally a small business only registers for GST once its turnover crosses a threshold, but a person selling goods through an e-commerce operator must register regardless of turnover, there is no small-seller exemption for them. A non-resident selling into India registers as a non-resident taxable person, which itself carries no threshold. So GST registration is a given from your first sale.

On top of that, the marketplace collects a small amount of GST at source on your sales and pays it to the government against your registration, at a rate that was reduced to 0.5% in total. That is a GST mechanism, entirely separate from the income-tax TDS discussed above, so on a single sale you can have both an income-tax withholding and a GST collection running, two different taxes to two different systems. A practising CA gets your income-tax TDS onto the right section, handles the mandatory GST registration through a representative in India, and keeps the two taxes properly separated and reconciled.

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What's involved

What the CA actually does

1
We fix the income-tax TDS
We make sure your withholding is under Section 195, not the resident-only 194-O the marketplace defaults to, and reconcile any wrong deduction.
2
We register you for GST
We handle the mandatory GST registration for a marketplace goods seller, as a non-resident taxable person through an Indian representative.
3
We compute the Indian business income
We work your Indian business profit and check your treaty and permanent-establishment position, so the income tax is right.
4
We keep the two taxes separate
We reconcile the income-tax TDS and the GST tax-at-source as the two different mechanisms they are.

What to have ready

Documents you'll typically need

Your marketplace sales and payout statements
The TDS and any GST collected by the marketplace
Your business costs, for the income computation
Your PAN, GST and residency details

Your destination country can change the details

Requirements differ from one consulate, university and visa route to the next — how recent the figures must be, how long funds must have been held, and which certificates are mandatory. We assemble the documents around the exact checklist you're applying under. To see how India's tax treaty with your country of residence affects related filings, set your country below or compare all 31 countries.

Frequently asked questions

Common questions

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Selling on an Indian marketplace from abroad?

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