To claim ITC on marketplace fee invoices, make sure each invoice carries your correct GSTIN, appears in your GSTR-2B for the month, relates to taxable business supplies and is not blocked under Section 17(5). Reconcile invoice totals with settlement deductions, record the credit in your books, and claim it in GSTR-3B within the time limit. Confirm current rules with your tax adviser.
What marketplace fee invoices cover
When you sell on a marketplace, the platform deducts charges from your settlement. Typical heads include commission, fixed or closing fees, shipping or logistics fees, payment collection fees, return-handling fees and advertising or promotion charges. The exact names and structure differ by marketplace, so check your seller agreement and rate card.
These are services supplied by the marketplace to you, and GST is charged on them. If you are a registered taxable person, that GST can be eligible input tax credit (ITC) under Section 16 of the CGST Act, subject to the conditions below. The credit sits on the fee invoice, not on your sales invoice to the customer.
Check eligibility before you claim
Do not claim credit just because an amount was deducted from your settlement. A deduction is not proof of a valid tax invoice. Check that:
- You hold a valid tax invoice or debit note for the fee.
- The invoice shows your GSTIN, not a blank or a different registration.
- The invoice appears in your GSTR-2B for the period.
- The service is used for your business and for taxable or zero-rated supplies.
- The credit is not blocked under Section 17(5).
- You are within the time limit under Section 16(4).
If you also make exempt supplies, credit may need apportionment or reversal under the ITC rules. That depends on your business mix, so confirm with your tax adviser and check the latest notifications on the GST portal.
Step-by-step: how to claim the credit
- Download the fee invoices from your seller panel or invoice section for the month. Many marketplaces issue them monthly or per settlement cycle.
- Verify the invoice details: your GSTIN, the marketplace's GSTIN, invoice number and date, SAC code, taxable value, and the tax split (CGST and SGST, or IGST).
- Download GSTR-2B from the GST portal after it is generated for the month.
- Match invoice by invoice against GSTR-2B. Mark each as matched, missing or mismatched.
- Book the invoices in your accounting software, with the GST shown separately from the expense.
- Claim eligible credit in GSTR-3B, in the ITC section, based on what is available in GSTR-2B and eligible under law.
- Follow up on gaps. Raise missing or wrong invoices with the marketplace and claim them in the month they appear in GSTR-2B.
If you hold registrations in more than one state, check that each invoice carries the GSTIN of the state registration you sell under. The credit lands in that GSTIN's ledger, and moving it later is difficult.
Match fee invoices to settlement deductions
The second check is commercial, not just tax. The fees on invoices should agree with what was deducted in settlements, and both should agree with your agreed terms.
| Check | Where to look | What to confirm |
|---|---|---|
| Invoice total vs deductions | Settlement report and fee invoice | Taxable value plus GST equals the amount deducted |
| Fee rate applied | Seller agreement or rate card | Charged rate matches the latest agreed terms |
| Credit notes | Invoice section, GSTR-2B | Fee reversals reflected on both sides |
| Tax availability | GSTR-2B | Every invoice you plan to claim is listed |
Doing this by hand across thousands of orders is slow. A reconciliation tool such as MarketplaceMetrics by Fundle can match settlements to sales and check commissions and fees against agreed terms, so you see a mismatch before it reaches your GST filing. Myntra Excel reports are reviewed today, and other marketplaces are in scope discussion.
Do not confuse ITC with TCS credit
E-commerce operators collect tax at source (TCS) under Section 52 of the CGST Act on the net value of taxable supplies made through them. TCS is not ITC on a fee invoice. It is reported by the operator and shows up in your electronic cash ledger once the operator's return is filed, and you can use it to pay your GST liability.
Check the current TCS rate on the CBIC notifications or with your tax adviser, and reconcile the TCS in your settlement report to what appears on the GST portal. Income-tax deductions on marketplace payouts are a separate matter. Keep them in a separate reconciliation.
Common mistakes that block or delay credit
- Claiming on invoices that are not yet in GSTR-2B.
- Invoices raised on a wrong or old GSTIN, or without your GSTIN.
- Booking fee deductions from the settlement report instead of the tax invoice.
- Ignoring credit notes, so credit is over-claimed.
- Claiming credit that is blocked under Section 17(5) or needs reversal.
- Missing the Section 16(4) deadline because gaps were found late.
A monthly close that includes an invoice-versus-GSTR-2B check catches most of these before filing.
Worked example
Illustrative example only. Use the GST rate shown on your actual invoices. Figures are not real rates or results.
| Invoice | Taxable value (₹) | GST on invoice (₹) | In GSTR-2B? |
|---|---|---|---|
| A: Commission | 60,000 | 10,800 | Yes |
| B: Shipping fee | 25,000 | 4,500 | Yes |
| C: Ad charges | 15,000 | 2,700 | No |
| Total | 1,00,000 | 18,000 |
The settlement deducted ₹1,18,000 in total, which matches the three invoices. Only invoices A and B are in GSTR-2B, so the claimable credit for the month is ₹10,800 + ₹4,500 = ₹15,300. The ₹2,700 on invoice C is held back. Raise it with the marketplace and claim it in the month it appears in GSTR-2B, within the time limit.
Questions and answers
Can I claim ITC on marketplace commission and shipping fees?
Generally yes, if the fee invoice carries your GSTIN, appears in GSTR-2B, relates to taxable business supplies and is not blocked under Section 17(5). Eligibility depends on your own facts, so confirm with your tax adviser.
What if a fee invoice is missing from GSTR-2B?
Do not claim it yet. Ask the marketplace to confirm the invoice was issued with your correct GSTIN and reported in its return. Claim the credit in the month it appears in GSTR-2B, and within the Section 16(4) time limit.
Is TCS deducted by the marketplace the same as ITC?
No. TCS under Section 52 is tax collected on your sales and is credited to your electronic cash ledger once the operator files its return. ITC arises from GST charged on fee invoices. They are reconciled and claimed separately.
Where do I find the marketplace's fee rates and invoices?
Fee rates are in your seller agreement and the current rate card. Invoices are usually in the seller panel's finance or invoice section, and deductions appear in settlement reports. Always confirm the latest terms with the marketplace.