Selling on Amazon has opened massive opportunities for Indian businesses, startups, and individual entrepreneurs. However, along with growth comes strict legal and tax compliance requirements. Many Amazon sellers face account suspension, penalties, or blocked payments due to non-compliance with GST, income tax, or Amazon policies.
This guide explains Amazon Seller Compliance in India in simple terms so you can sell confidently, stay compliant, and scale your business without legal issues.
Who Is Required to Follow Amazon Seller Compliance?
You must follow compliance rules if you sell on Amazon as:
- Individual seller
- Proprietorship
- Partnership firm
- LLP
- Private Limited Company
- NRI selling through Amazon India
Even if your turnover is small, compliance is mandatory.
Key Amazon Seller Compliance Requirements
1. GST Registration (Mandatory)
- GST registration is compulsory for Amazon sellers, even if turnover is below the threshold
- GSTIN must be linked to your Amazon Seller account
- Correct GST rates must be applied to products
Common Mistake: Selling without GST or using an inactive GST number
2. Amazon GST TCS Compliance
Amazon collects Tax Collected at Source (TCS) under GST.
- TCS rate: 1% (0.5% CGST + 0.5% SGST or 1% IGST)
- Appears in GSTR-2B
- Must be reconciled monthly
Failure to match TCS can lead to GST notices.
3. Monthly GST Returns
Amazon sellers must file:
- GSTR-1 – Sales details
- GSTR-3B – Tax payment summary
Returns must match:
- Amazon sales reports
- GST portal data
- TCS statements
4. Income Tax Compliance for Amazon Sellers
Amazon income is taxable business income.
You must:
- Maintain proper books of accounts
- File ITR-3 or ITR-4 (depending on business type)
- Declare Amazon commission, shipping fees & returns correctly
5. Amazon TDS under Income Tax
Amazon deducts TDS under Section 194-O:
- Rate: 1% of gross sales
- Reflected in Form 26AS
- Can be claimed as credit in ITR
Mismatch can block refunds.
6. Proper Invoicing & E-Invoicing
Amazon sellers must:
- Issue GST-compliant invoices
- Mention correct HSN codes
- Follow e-invoice rules if applicable
- Keep invoice copies for audits
7. Product & Legal Compliance
Depending on product category, you may need:
- FSSAI License (food products)
- BIS certification
- Brand authorization / trademark
- Import-Export Code (for cross-border sales)
Penalties for Non-Compliance
Non-compliance may result in:
- Amazon account suspension
- Blocking of settlements
- GST penalties & interest
- Income tax notices
- Legal action for repeated defaults
How Saving Mantra Helps Amazon Sellers
Saving Mantra provides end-to-end Amazon seller compliance services, including:
- GST registration & returns
- Amazon TCS reconciliation
- Income tax filing
- TDS compliance
- Invoice & report matching
- Compliance health check
Our experts ensure your Amazon business stays 100% compliant and audit-ready.
Frequently Asked Questions (FAQs)
Is GST mandatory for Amazon sellers?
Yes, GST registration is mandatory for selling on Amazon.
Can I sell on Amazon without compliance?
No. Amazon strictly monitors GST, TDS, and tax filings.
What happens if GST returns are not filed?
Your GST may be suspended and Amazon may block payments.
Conclusion
Amazon seller compliance is not optional—it is essential for long-term success. Proper GST, income tax, and platform compliance protects your business, improves credibility, and prevents account issues.
If you want stress-free Amazon compliance, professional support is the smartest choice.
Disclaimer
This article is for informational purposes only and does not constitute legal, tax, or financial advice. Compliance requirements may change based on government notifications. Please consult qualified professionals before taking action.