What Does Etsy Withhold and Remit to Indian Tax Authorities?

As of November 2023, new sellers in India aren't able to open shops on Etsy. This article is for sellers in India who already have an open shop.

India sellers are subject to Tax Collected at Source (TCS) on certain sales and Tax Deducted at Source (TDS) on all sales. Etsy remits the TCS and TDS to the Indian Tax Administration (ITA) as required by Indian law.

Etsy will report the amounts under the Tax IDs provided by sellers, and sellers will be able to avail of a credit in their tax account with the ITA for the amounts remitted by Etsy.

You must have an active and regular GSTIN on file in your shop. Etsy will periodically check your GSTIN. If your GSTIN isn’t active and regular, your shop may be suspended until you add an active and regular GSTIN.

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What percentage of my sales does Etsy withhold and remit to Indian tax authorities?

Etsy is required to collect and remit 1% Tax Collected at Source (TCS) on your behalf for any transactions through India payments (RazorPay) and Etsy Payments (Payoneer). To report your TCS to the Indian Tax Authorities (ITA), we need an active GSTIN. If you haven't provided an active GSTIN, the Indian Tax authorities will be unable to assign amounts withheld by Etsy to your account. Etsy will suspend any accounts that do not have a regular and active GSTIN on file.

Etsy is also required to collect and remit Tax Deducted at Source (TDS) on your behalf on all transactions. Etsy will collect and remit 1% where you have provided a PAN or your GSTIN. Where your PAN is non-compliant or you have not provided Etsy with a PAN or GSTIN, Etsy may apply a higher rate of 5% TDS to your account.

How do I add a GSTIN or PAN on Etsy?

You must have a regular and active GSTIN on file with your shop in order to sell on Etsy.

Etsy will periodically check your GSTIN. If your GSTIN isn’t active and valid, your shop may be suspended until you add an active and valid GSTIN.

  1. Sign in to Etsy and go to Shop Manager.
  2. Open Finances.
  3. Select Payment settings.
  4. Choose Complete under Add your GSTIN.
  5. Etsy will verify your GSTIN is valid and active.

If you see an error that the GSTIN isn’t active, contact the Indian tax authority for assistance.

  1. Sign in to Etsy and go to Shop Manager.
  2. Open Finances.
  3. Select Legal and tax information.
  4. Add your GSTIN and/or PAN under Primary Taxpayer ID.
  5. Choose Submit to Etsy.

Please ensure that the PAN you provide is contained within the GSTIN you’ve added.

Your address on the Legal and tax information page must be set to your Indian address before you can provide us with your PAN.

Learn more about updating your taxpayer information.

How do I get a GSTIN?

To get a GSTIN, apply on the Goods and Services Tax site, which walks you through how to do it with instructions and video. It can take a few weeks for you to receive the GSTIN number from the tax authorities.

We know receiving a GSTIN can be complicated, so we’ve partnered with Clear Tax to assist sellers with registering for a GSTIN.

A GSTIN is a combination of 15 numbers and letters, starting with 2 numbers. The 10 character PAN is part of a GSTIN. The PAN that you provide should be contained within the GSTIN number.

Once you’re registered with GST, you may be obligated to pay GST to tax authorities on the goods you sell.

What if I provide Etsy with my GSTIN or PAN mid-month?

You can update your taxpayer ID at any time. Any changes to the taxpayer ID on file with Etsy may affect the % of TDS for the month in which you make the update, and onwards.

How can I keep track of the TDS and TCS amounts?

For any eligible sales, you can view the amount of TDS and TCS in your Payment account. You’ll see a line item in your Recent activities for the amount of TDS and TCS. You’ll also see the amounts in your Activity summary.

You will also be able to log in to your tax account on the tax authority portal to see the TDS and TCS remitted by Etsy.

Ensure that your regular and active GSTIN and tax compliant PAN is on file in your Etsy shop. Without this, the tax authorities may be unable to assign the TDS and TCS collected to your tax account. Etsy is unable to correct information for prior periods.

How do I get a TDS certificate (form 16A)?

TDS certificates (Form 16A) will be emailed to you each quarter that you’ve had an active and valid PAN/GSTIN on file.

We partner with Deloitte to send your TDS certificate from inprjeiuctds@deloitte.com to the email on file with your shop. Your TDS certificate won’t be available for download in your Etsy shop.

What if my name or address are wrong on my TDS certificate?

We use the information you’ve provided on your Legal and tax information. Learn how to update this.

We’re unable to send a new certificate. If you’re concerned about inaccurate information on your certificate, we recommend speaking with a local tax professional for guidance.

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