GST on E-Commerce Sales: Reconcile Settlements to Invoices

Orders total ₹1 lakh, while the platform pays ₹86,000 after refunds, charges and deductions. The useful result is a working that explains the facts, the calculation or classification, and the evidence behind the conclusion. This guide shows how to prepare that working and where a reviewer should investigate before accepting the result.

Scope and applicable period

Indian GST; apply the law, notification and return version for the transaction’s own period. The worked figures are illustrative, not a declaration of a newly notified rate.

Verification date: 11 October 2026. Figures and rates identified as assumptions are teaching examples; apply the stated conditions and the actual facts to a real assignment.

The key principle

An e-commerce settlement is a net cash movement, not the sales figure. Reconcile orders, returns, platform fees, tax deductions and withheld amounts separately. Also establish whether the seller is the supplier for the transaction or a notified platform-liability arrangement applies. GST TCS, income-tax TDS and a commission invoice are different items and should not be netted into one expense.

Worked example

If sales are booked as ₹86,000, revenue, returns, platform expenses and deduction receivables can all be misstated. Start from order-level sales and show the bridge to the bank amount. Match cancelled orders and returned goods to the appropriate commercial and GST documents. Keep unsettled balances open until the platform pays or explains them. A reconciliation should identify both the period of sale and the later settlement period.

A practical sequence

Start from order-level gross sales, not the bank settlement amount. Match returns, cancellations, commissions, tax deductions and other platform adjustments separately.

Reconcile settlement references to bank receipts and identify amounts still receivable. Map the sale and tax to the appropriate return while keeping platform service charges in their own expense and credit working.

Review unusual deductions with the platform; a smaller bank receipt does not by itself reduce taxable sales.

Keep transaction facts and return treatment separate

GST work involves several linked questions: what was supplied, which registration is involved, when liability arises, how it is valued and whether credit is available. A correct accounting entry does not answer all of them. Build the working at invoice level wherever practical, with transaction dates and document references. Reconcile values and tax separately, including amendments and reversals. When a rule or rate changes, use the notified effective date and conditions for the actual transaction; a Council recommendation or a software master update is not, by itself, the legal commencement of the change.

Evidence checklist

Keep the following records linked to the same entity, period and working version. Identify missing items explicitly; a checked box should mean the document was examined and supports the stated conclusion.

• Order and invoice exports
• Returns, refunds and cancellation records
• Platform commission and other invoices
• GST TCS and income-tax deduction statements
• Settlement reports and bank receipts

Common mistakes and how to avoid them

• Booking net settlement as revenue. Compare the conclusion with the order and invoice exports and resolve any conflicting facts.
• Treating TCS and TDS as platform commission. Trace the affected item to the platform commission and other invoices before finalising the working.
• Applying one platform's tax treatment to every channel. Use the settlement reports and bank receipts to make the final position and remaining exceptions clear.

Before you finalise

Recheck the example’s assumptions against the actual assignment, resolve the identified exceptions and make the final figure or conclusion traceable to its source. Preserve the reviewed version and the reason for material changes. For this task, the settlement reports and bank receipts should agree with the conclusion presented to the client, reviewer or authority.

Frequently asked question

Can the bank receipt alone prove turnover? No. It is the end of the settlement bridge, after several items that must be recorded separately.

Sources and further reading

• GSTN — GSTR-1 user guide
• CGST Act, 2017 — India Code

Related guide: Gstr 2b reconciliation with books checklist.