Download full-year sales, returns, settlement, fee-invoice and tax-statement reports for every marketplace and GSTIN. Reconcile net sales to settlements received, explain every difference (timing, returns, fees, TCS/TDS), then tie turnover to GST returns and tax statements. Keep unsettled and disputed items in a schedule, and give your CA one organised file with working notes.
What your tax auditor needs from marketplace data
Section 44AB requires certain taxpayers to get their accounts audited when turnover or gross receipts cross the prescribed limits, with the report furnished in the prescribed forms. The limits and conditions have been revised over time, so confirm the current position for your business with your chartered accountant.
Marketplace sellers face a specific problem: turnover sits in thousands of orders, while cash arrives as net settlements after deductions. Your auditor will typically want to see:
- Turnover by marketplace, tied to your books and GST returns.
- Sales returns and credit notes, supported by return reports.
- Expenses such as commission, shipping, ads and other fees, supported by invoices.
- Tax deducted or collected by the marketplace, matched to government statements.
Collect source reports for the full financial year
Start with the marketplace's own reports, not your bank statement. Download these for every marketplace and every GSTIN, from 1 April to 31 March, plus the first few weeks after year-end for cut-off checks:
- Order-level sales reports
- Return and cancellation reports
- Settlement or payout reports
- Commission, fee and ad invoices, and any credit or debit notes
- TCS and TDS statements or certificates
Report names and formats differ by marketplace, so check your seller panel. Download early, because portals may not keep older data in the same format.
Reconcile sales to settlements, not just bank credits
A bank credit is a lump sum covering many orders, returns and deductions. Reconcile at order or settlement-batch level instead:
- Start with gross sales and subtract returns and cancellations to get net sales.
- Subtract fees, commissions, shipping charges and adjustments deducted by the marketplace.
- Subtract tax deducted or collected at source.
- Compare the result with settlements actually received.
- Classify every remaining difference: timing, short payment, wrong deduction or missing return credit.
Do not leave a difference as a plug figure in the ledger. Your auditor will ask what it is.
Check fees, TCS and TDS against agreed terms
Your auditor will test whether expenses are supported and whether tax deductions match government records. For fees, compare what was charged with your seller agreement or current rate card. For tax, compare marketplace deductions with the GST TCS details on the GST portal and with your Form 26AS or AIS for TDS. Rates, thresholds and treatment can change, so confirm the latest rules with your tax adviser instead of relying on old workings.
This is slow in spreadsheets across a full year. MarketplaceMetrics by Fundle reconciles sales and settlements and checks commissions and fees against agreed terms. Myntra Excel reports are reviewed today, and other marketplaces can be discussed for scope.
Handle cut-off, returns and disputed items
Year-end is where most audit queries arise. Prepare a separate schedule for:
- Unsettled orders: delivered by 31 March but paid after year-end. These are receivables, not missing money.
- Returns in transit: refunds or credit notes that straddle year-end.
- Disputed or short-paid amounts: deductions you are contesting or have raised a claim for.
- Lost or damaged inventory claims: open recovery cases with the marketplace.
Agree with your CA how each category will be treated in the books, and record the reasoning in a short note.
Build the audit file your CA can sign off quickly
Give your auditor one organised pack instead of scattered downloads:
- A summary reconciliation per marketplace: gross sales to net settlement.
- Turnover tie-out between books, GSTR-1 and GSTR-3B.
- Fee and commission summary with invoice references.
- TCS and TDS reconciliation against government statements.
- The cut-off and disputed-items schedule.
- Raw reports in a clearly named folder for sampling.
If you want this reconciliation built in rather than rebuilt each year, MarketplaceMetrics is offered on a tailored quote based on your marketplaces and volumes.
Worked example
Illustrative example only. Figures are simplified, ignore GST components and are not actual rates or results.
| Line | Amount (₹, illustrative) |
|---|---|
| Gross sales invoiced | 50,00,000 |
| Less: customer returns | 7,00,000 |
| Net sales per books | 43,00,000 |
| Less: marketplace fees deducted | 4,10,000 |
| Less: TCS and TDS deducted | 60,000 |
| Expected settlement | 38,30,000 |
| Actual settlements received | 37,50,000 |
| Difference to explain | 80,000 |
On review, ₹55,000 relates to March orders settled after year-end (timing) and ₹25,000 is deductions that do not match the agreed terms, so a recovery claim is raised. The difference is now fully explained and ready for the auditor.
Questions and answers
Which marketplace figure counts as turnover for a 44AB audit?
Turnover is generally based on sales recorded in your books, net of returns, not on bank receipts or payouts. Marketplace fees and tax deductions are not subtracted from it. Confirm the exact treatment for your business with your chartered accountant.
Do I need order-level data or are monthly summaries enough?
Monthly summaries help, but auditors often sample transactions, so keep order-level and settlement-level reports available. Summaries should tie back to those source reports. If a difference appears, order-level data lets you trace it quickly.
How do I treat settlements received after 31 March?
Orders delivered before year-end but paid after it are normally shown as receivables, with turnover recognised in the year of sale. List them in a cut-off schedule with settlement dates, and agree the treatment with your CA.
Where do I find the correct fee and tax deduction rates?
Fee rates are in your seller agreement, rate card and fee invoices. Tax deduction rules come from the law and the marketplace's statements. Rates and policies change, so confirm the latest terms with the marketplace and your tax adviser.