Amazon & Marketplace GST Reconciliation: Complete Technical Guide

CredInfinite Whitepaper — May 2026

Executive Summary

Marketplace sellers in India face a GST compliance problem that most software tools do not solve: reconciling what you sold, what was returned, what TCS was deducted, and what GST you actually owe — across multiple platforms with incompatible file formats.

This guide covers the technical realities of marketplace GST data: how Amazon's MTR reports are structured, how cross-period returns create GST liability errors, how TCS interacts with GSTR-3B, and how sellers can generate accurate GSTR-1 from settlement data in under 2 minutes.

Data in this guide is based on analysis of real Indian marketplace seller data. All seller details are anonymised.

1. The Marketplace Settlement Problem

A marketplace seller with ₹25L monthly GMV across three platforms faces this situation every month-end:

None of these files are in a format that maps directly to GSTR-1 tables. Every seller or their CA manually transforms this data — typically spending 4–6 hours per platform per month.

2. Understanding Amazon MTR Reports

Amazon provides two GST report files. The B2C MTR (Monthly Transaction Report) covers consumer sales with no buyer GSTIN — 78 columns, each row a single transaction (shipment, refund, or cancellation). The B2B MTR covers business sales with buyer GSTIN present, identical structure, used for T4 (B2B) entries in GSTR-1.

Critical column: Transaction Type

Common mistake: Including Cancels and FreeReplacements in GST aggregates inflates volume counts. These rows have ₹0 invoice amount and should be filtered out before any calculation.

IGST vs CGST+SGST determination

Amazon determines tax type based on Ship From state vs Ship To state. If seller_state == customer_state, the supply is intrastate (CGST+SGST). If seller_state != customer_state, it's interstate (IGST).

Example — UP-based seller with FBA warehouses in UP and Karnataka:

Important: 85–90% of marketplace shipments are typically interstate (IGST) for most sellers. Incorrectly applying CGST+SGST to interstate supplies is a common audit trigger.

3. Cross-Period Returns: The Hidden GST Trap

This is the most technically complex GST issue for marketplace sellers and the one most commonly handled incorrectly.

The scenario

A customer orders a product on 28 March. The product ships on 30 March and is delivered on 2 April. The customer returns it on 15 April. Three questions arise: which GST period does the original supply belong to (March, when shipped — supply date = ship date), which period does the return fall in (April, when received), and how does the April return affect the March GSTR-1 that is already filed?

Amazon's treatment

In the B2C MTR Refund row, Amazon retains the original invoice date (30 March), not the return processing date. The refund row will appear in April's MTR file, but the invoice date column says 28–30 March. Using invoice date for period attribution reduces March numbers; using transaction processing date reduces April numbers.

Correct GST treatment

Under GST rules, a credit note for a return is issued in the return month (April). The original supply (March) is not amended. So April GSTR-1 should show a credit note against the March supply.

4. TCS: Tax Collected at Source by Marketplaces

Under Section 52 of CGST Act, marketplace operators (Amazon, Flipkart, Myntra) collect TCS at 1% on net taxable sales.

What to do with TCS: TCS collected by the marketplace is deposited with the government on your behalf. It reduces your actual GST liability. In GSTR-3B Section 8.1, you declare TCS credits received. This offsets what you owe in Section 3.

Seller error: Not claiming TCS. If ₹1,200 TCS was deducted by Amazon in a month and you don't claim it in GSTR-3B, you pay that ₹1,200 again. Across 3 platforms for 12 months, unclaimed TCS commonly reaches ₹15,000–₹40,000/year for a ₹1Cr GMV seller.

5. HSN Codes: The Myntra Problem

Amazon and Flipkart include HSN codes in their GST reports (though Amazon mixes 4-digit and 8-digit codes for the same SKU, which needs normalisation). Myntra does not include HSN codes. Myntra reports contain only an article_type column (e.g., "Casual Shirts", "Running Shoes", "Wallets").

GSTR-1 Table 12 (HSN summary) is mandatory. Without HSN codes, you cannot file T12. The workaround is to map product descriptions to HSN codes using a rule table:

Once a mapping is confirmed for a product type, it applies to all transactions for that type across all months. A rule set of 50–100 mappings covers the inventory of most fashion/lifestyle sellers.

6. From Marketplace Files to GSTR-1: Step by Step

Input files needed: Amazon B2B MTR + B2C MTR (ZIP file from Seller Central), Flipkart GSTR-1 report (XLSX from Seller Hub), and Myntra Packed + RT + RTO reports (from Partner Hub).

Processing steps

1. ✓Upload all files — system detects platform by file structure
2. ✓Parse each file into normalised transaction rows
3. ✓Apply cross-period return handling (refunds attributed to return month)
4. ✓Apply HSN mapping (seller confirms or AI suggests)
5. ✓Aggregate by GSTR-1 table
6. ✓Validate: check T4+T7+T14 totals match; check HSN coverage %
7. ✓Download portal-ready JSON

Typical processing time: 90 seconds to 4 minutes depending on file size.

7. Common Reconciliation Errors and Fixes

8. Multi-Platform ITC: Commission Fees

Platform commissions carry 18% GST. This is input tax you can claim.

Example — single platform, 3 months:

These commission invoices are in settlement reports, not in GST reports. Most sellers and CAs miss this because the workflow focuses on GST reports only. Uploading settlement reports surfaces this ITC automatically.

9. Filing Validation Before Submission

Before downloading GSTR-1 JSON for portal upload, run these checks:

• ✓T4 + T7 + T14 total taxable value matches total from raw transaction data
• ✓T12 HSN coverage ≥ 95% (flag entries missing HSN)
• ✓GSTR-1 total taxable ≈ GSTR-3B Section 3.1(a) taxable (should match within rounding)
• ✓TCS credit in GSTR-3B Section 8.1 = sum of TCS columns across all platforms
• ✓No negative totals in T7 (if refunds exceed shipments in a month, check period attribution)