Open your seller agreement or rate card and note whether commission applies to the GST-inclusive selling price or the price excluding GST. Then take each order from the settlement report, back out GST at the applicable rate if needed, multiply by the agreed commission percentage and compare with the amount charged. Differences beyond rounding point to a wrong base, which you should raise with order-level evidence.
Why the price base changes your commission
Marketplace commission is a percentage, but a percentage of what? Under some terms it applies to the selling price the customer pays, which includes GST. Under others it applies to the taxable value, which excludes GST. The same percentage on two different bases gives two different amounts, and on high-volume SKUs the gap adds up quickly.
Which base applies is a contractual question. Do not infer it from a settlement report, or from what another brand on the same marketplace told you. Terms can differ by brand, category and agreement date.
Find the commission base in your documents
Start with the paperwork, not the numbers. Collect:
- Your seller agreement and its commercial annexure
- The current rate card or fee schedule on the seller portal
- Any email or addendum that changed commercial terms
- Column definitions in the settlement report
Look for phrases such as selling price, invoice value, taxable value or net of GST. If the wording is ambiguous, ask your account manager to confirm the base in writing. Rate cards get revised, so confirm you are reading the latest version for the period you are auditing.
Recompute commission step by step
- Pick a sample of orders across categories, price points and a few returns.
- From the settlement report, note order ID, SKU, customer-paid price, any marketplace-funded discount, GST amount if shown, and commission charged.
- Decide the base per your agreement: the inclusive price, or the taxable value (inclusive price divided by 1 plus the GST rate). Take the GST rate from your invoice or tax master and confirm it with your tax adviser.
- Multiply that base by the agreed commission percentage from your rate card.
- Compare with the commission charged and record the difference per order.
- Check the pattern. A constant ratio across orders suggests a wrong base. Random differences suggest other causes, such as slabs or discounts.
Read the pattern of differences
| What you see | Likely cause | Next step |
|---|---|---|
| Charged matches the inclusive-price calculation, but your agreement says exclusive | Wrong base applied | Raise with sample orders and the clause |
| Charged is lower than both calculations | Different slab or discount treatment | Check category and price slab on the rate card |
| Gap varies by SKU | GST rate mapped differently per product | Verify rate mapping with your tax adviser |
| Differences of a few paise | Rounding | Note it, act only if systematic |
Check discounts, returns and other fee lines
The base also depends on which price. Confirm whether commission is calculated before or after marketplace-funded discounts and coupons, and whether your own discounts change it.
For returns, check that commission is reversed fully or partly as your terms say, and on the same base used for the original sale. A mismatch here often hides inside net settlement figures.
Keep other lines separate: fixed fees, shipping, collection and similar charges may have their own basis, and GST on fees is a distinct item. Audit each line against its own clause rather than blending them with commission.
Make it routine and escalate with evidence
A one-off sample finds problems; a monthly check keeps them from recurring. Spreadsheets work for a few hundred orders but struggle at marketplace volumes. MarketplaceMetrics by Fundle reconciles 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 in scope discussion.
When you raise a dispute, send the order list, the agreement clause, your calculation and the difference. Then track the case until a credit or adjustment appears in a settlement.
Worked example
Illustrative example only. Figures, GST rate and commission rate are assumptions, not actual marketplace terms.
Assume a customer pays ₹1,120 for a product, with an illustrative GST rate of 12%. Taxable value is ₹1,120 ÷ 1.12 = ₹1,000. Assume the agreed commission is 10% on taxable value.
| Item | Amount (₹, illustrative) |
|---|---|
| Expected commission (10% of ₹1,000) | 100 |
| Commission if applied to ₹1,120 | 112 |
| Difference per unit | 12 |
| Difference across 500 units | 6,000 |
If the settlement shows ₹112 per unit, the pattern is consistent with commission being charged on the inclusive price. Check the clause, then raise it with the order list.
Questions and answers
Is marketplace commission charged on the GST-inclusive or exclusive price?
It depends on your agreement and rate card, so there is no universal answer. Check the wording in your seller agreement, such as selling price or taxable value, and confirm the latest terms with your account manager in writing.
Where do I find the GST rate to back out of the price?
Use the rate on your own tax invoice or product tax master, since it can vary by product. Do not rely on assumptions. Confirm the applicable rate and any recent changes with your tax adviser before recomputing.
How many orders should I sample for a commission check?
Start with a sample covering each category, price band and some returns, then widen it if you find a pattern. If differences are systematic, move to a full-period check, because a small sample may understate the total.
What should I send the marketplace when I find an overcharge?
Send the order IDs, the relevant agreement or rate card clause, your recalculation, the charged amount and the difference. Ask for a written response and track the case until a credit or adjustment shows in your settlement.