To handle state-wise GST reporting for marketplace sales, export order-level data with delivery state and invoice date, tag each sale intra-state or inter-state against your registration state, then summarise taxable value and tax by state and rate. Net off credit notes in the period issued, and reconcile the totals with the marketplace's tax statement, TCS credits and your GSTR-1 draft before filing.
Why GST reporting has to be state-wise
For goods sold through a marketplace, the tax split depends on the place of supply, which is generally where delivery ends, compared with the state of your registration. If the customer is in the same state as your registration, the sale is intra-state and attracts CGST and SGST (or UTGST). If the customer is in another state, it is inter-state and attracts IGST. Your books and GSTR-1 workings therefore need values by delivery state, not one total per marketplace.
Marketplaces also report to the tax department. Operators collect TCS and file their own returns, so your numbers should be explainable against theirs. Confirm current rules, rates and thresholds in the CGST Act, the latest notifications or with your tax adviser rather than relying on memory.
Collect the right data from each marketplace
Report names differ by marketplace, so check your seller panel for the closest equivalent of each item below.
- Order-level sales report: order ID, invoice number and date, SKU, HSN, taxable value, tax charged and ship-to (delivery) state.
- Returns and cancellations report: return or RTO date, credit note details, original order reference and state.
- Settlement report: payouts, commission, fees, adjustments and any TCS or TDS deducted.
- Marketplace tax statement: the operator's summary of supplies and TCS for the period.
- Your registration list: every GSTIN and additional place of business, including states where stock is held.
Use the delivery state, not the billing address, unless your tax adviser tells you otherwise for a specific case.
Build your state-wise workings step by step
- Fix the period. Group sales by invoice date for the GST month, not by settlement date.
- Lock the extract. Download order-level data once the month closes and keep an unedited copy.
- Standardise state names. Clean variants such as Orissa and Odisha, or Delhi and NCT of Delhi, so pivots do not split one state in two.
- Tag each order. Compare the delivery state with the state of the GSTIN that supplied the goods. Same state means CGST plus SGST; different means IGST.
- Summarise. Pivot by marketplace, supplying GSTIN, delivery state, HSN and tax rate. Take the rate from your product master and confirm it with your adviser.
- Net off returns. Deduct credit notes in the period they are issued (see the next section).
- Compare. Check totals against the marketplace tax statement and your GSTR-1 draft, and log every difference with order IDs.
Handle returns, cancellations and credit notes
Returns are where state-wise numbers usually drift. A sale invoiced in one month may be returned in the next, so the credit note belongs to the later period even though the original sale sits in the earlier one.
- Reverse the tax in the same state and tax type as the original sale.
- Check who issues the credit note under each marketplace's model and your seller agreement.
- Treat partial returns and exchanges as separate lines with their own values.
- Check how cancellations before shipment are invoiced, since they may never become a supply.
- Keep RTO (return to origin) cases tagged to the original delivery state, not the warehouse state.
Reconcile with TCS and settlements
A settlement is not the same as sales. Payout is broadly sales, less returns, commission, fees, adjustments and tax deductions, and it arrives with a lag. Compare sales by invoice period with settlements by payout period, and carry the timing differences forward explicitly.
For GST TCS, match the amount deducted in your settlement reports with the TCS shown against your GSTIN on the GST portal, and review mismatches before claiming credit. Income-tax TDS on marketplace payouts is a separate matter, so check the applicable rate and certificate process with your adviser.
Commission and fee lines also need checking against your agreed rate card. MarketplaceMetrics by Fundle reconciles marketplace sales and settlements, checks commissions and fees against agreed terms, and tracks returns and recovery cases. Myntra Excel reports are reviewed today, and other marketplaces are a scope discussion.
Common mistakes and a monthly checklist
Most state-wise errors come from a few habits:
- Using billing state instead of delivery state.
- Mixing settlement month with invoice month.
- Reporting all marketplaces as one combined line.
- Ignoring stock held in marketplace warehouses in other states.
- Fixing numbers by hand in the extract with no audit trail.
Each month, run this checklist: lock the extract, clean state names, tag intra and inter-state, net off credit notes, compare with the marketplace tax statement, match TCS, then file and archive the workings.
Worked example
Illustrative example only. A seller registered in Karnataka ships from Bengaluru. For one month, the net taxable value by delivery state looks like this (all ₹ figures illustrative):
| Delivery state | Gross taxable value | Credit notes | Net taxable value | Tax type |
|---|---|---|---|---|
| Karnataka | ₹2,00,000 | ₹0 | ₹2,00,000 | CGST + SGST |
| Maharashtra | ₹3,00,000 | ₹30,000 | ₹2,70,000 | IGST |
| Delhi | ₹1,00,000 | ₹10,000 | ₹90,000 | IGST |
| Total | ₹6,00,000 | ₹40,000 | ₹5,60,000 |
The seller then compares the ₹5,60,000 net figure and the state split with the marketplace's tax statement. Any gap is traced to specific order IDs, such as a return that fell into a different month. Tax is applied at the rate for each HSN, confirmed in your product master.
Questions and answers
Does GSTR-1 need state-wise marketplace sales?
Yes, in effect. GSTR-1 asks for place of supply for many supplies, and e-commerce supplies are reported separately by operator. The exact tables change over time, so check the current GSTR-1 layout on the GST portal or with your tax adviser.
Should I use invoice date or settlement date?
Use invoice date for GST reporting, because tax liability follows the supply, not the payout. Use settlement date only for cash and payout reconciliation. Keep both views and explain timing differences between them rather than mixing them in one sheet.
What if my state totals differ from the marketplace's statement?
Start with timing differences, then returns, cancellations and state-name mismatches. Trace the gap to order IDs. If the marketplace's data looks wrong, raise it through the seller support channel with order-level evidence, and keep records of the response.
Do I need registration where marketplace warehouses hold my stock?
Possibly. Stock stored in another state may need to be declared as an additional place of business or may need a separate registration. Confirm with your tax adviser and check your marketplace's seller terms for fulfilment arrangements.