E-Commerce Compliance & Advisory Services in India – FDI Marketplace Structuring, Consumer Protection (E-Commerce) Rules 2020, GST TCS (Section 52), Legal Metrology, DPDP & Payment-Aggregator Compliance

Q: Can a foreign-funded company sell its own inventory online in India?

Under Press Note 2 of 2018 and the FEMA NDI Rules, FDI is allowed up to 100% automatic only in the marketplace e-commerce model. Inventory-based e-commerce with FDI is not permitted. A marketplace with FDI cannot own inventory, cannot let one seller dominate sales, and cannot influence sale price.

Q: What is GST tax collected at source (TCS) for e-commerce operators?

Under Section 52, an e-commerce operator must collect tax at source on the net value of taxable supplies made by sellers through it and report this in monthly GSTR-8 returns. Sellers claim the TCS as credit. Operators need TCS registration in each state of supply.

Q: What is Section 9(5) operator liability?

Section 9(5) makes the e-commerce operator liable to pay GST as if it were the supplier for certain notified services, such as specified transport, accommodation, and restaurant services. This differs from TCS and changes who invoices and pays the tax.

Q: What does an e-commerce business have to disclose under the Consumer Protection Rules?

The Consumer Protection (E-Commerce) Rules 2020 require operators to disclose seller details, price break-up, country of origin, return / refund terms, and grievance-redressal details, appoint a grievance officer, and avoid unfair price or listing manipulation and fake reviews. The CCPA can act on breaches.

Q: Do online product listings need Legal Metrology labelling?

Yes. Under the Legal Metrology (Packaged Commodities) Rules, online listings of pre-packaged goods must display MRP, net quantity, manufacturer / importer / packer details, date of manufacture, and consumer-care details. Importers and manufacturers also need Legal Metrology registration.

Q: How does the DPDP Act affect an e-commerce platform?

Under the DPDP Act 2023, an e-commerce platform is a data fiduciary and must process customer data on consent or another lawful basis, give notice, limit use to the stated purpose, keep data secure, and honour data-principal rights and breach duties. As an IT Act intermediary it must also observe due-diligence to keep safe harbour.

Q: Does an e-commerce operator have to deduct TDS on seller sales?

Yes. Under Section 194-O, an e-commerce operator must deduct income-tax at source on the gross sale amount of goods or services of a resident seller facilitated through its platform, subject to the threshold in the section. This is separate from GST TCS under Section 52; the seller claims credit in its return.

E-commerce sits at the intersection of more regulators than almost any other business — a single online platform must comply with FDI policy under Press Note 2 of 2018 and the FEMA Non-Debt Instruments Rules, the Consumer Protection Act 2019 and the Consumer Protection (E-Commerce) Rules 2020, GST with its special tax-collected-at-source and operator-liability provisions, the Legal Metrology (Packaged Commodities) Rules, the Digital Personal Data Protection Act 2023, the IT Act 2000 intermediary rules, and the RBI payment-aggregator framework. A wrong choice between the marketplace and inventory model alone can render an entire foreign-funded structure non-compliant.

Our e-commerce advisory practice helps founders, marketplaces, D2C brands, and aggregators build a platform that is investor-ready and audit-proof — FDI-compliant marketplace structuring, Consumer-Protection and grievance-redressal frameworks, GST and TCS registration, returns and reconciliation, Section 9(5) operator-liability mapping, Legal Metrology labelling, DPDP and intermediary compliance, payment-aggregator and escrow structuring, seller and vendor agreements, sector licences such as FSSAI, trademark protection, and funding or M&A support. Whether you are launching a marketplace, raising foreign capital, or responding to a consumer-forum or GST notice, we turn a tangle of rules into a clean compliance map.

Press Note 2

FDI Marketplace

CP Rules 2020

Consumer Protection

Sec 52 TCS

GST Collection

DPDP 2023

Data Protection

Laws & Frameworks We Work Under

Press Note 2 (2018)

FEMA NDI Rules

Consumer Protection Act 2019

E-Commerce Rules 2020

GST TCS (Sec 52)

Sec 9(5) Operator Liability

Sec 194-O TDS

Legal Metrology 2009

DPDP Act 2023

IT Act & Intermediary Rules

RBI PA / PG Guidelines

FSSAI & Sector Licences

Shops & Establishment

E-Commerce Engagements We Handle

Setup

Marketplace Entity & FDI Structuring

Choosing the right model and building a foreign-investment-compliant structure, since inventory-based e-commerce with FDI is not permitted while a marketplace can take 100% FDI.

Marketplace vs inventory model
Entity & FDI structuring
FEMA / FC-GPR reporting
Group-company conditions
Seller-neutrality compliance
Downstream-investment check

Consumer

Consumer-Protection Compliance

Building the disclosure, grievance, and fair-practice framework mandated for every e-commerce entity under the 2020 Rules.

Mandatory seller disclosures
Grievance officer appointment
Consumer redressal process
Country-of-origin display
No unfair trade practice
Return / refund policy

Tax

GST, TCS & Operator Liability

Handling the special indirect-tax regime for operators — collecting tax at source on seller supplies and discharging GST directly on notified services.

GST & TCS registration
TCS collection & GSTR-8
Sec 9(5) liability mapping
Multi-state warehouse GST
Input tax credit
Seller reconciliation

Metrology

Product Labelling & Legal Metrology

Ensuring every pre-packaged product listed online carries the declarations required under the Packaged Commodities Rules.

Pre-packaged declarations
MRP & net-quantity display
Manufacturer / importer details
Online-listing compliance
Legal Metrology registration
Country-of-origin labels

Data

Data Protection & IT Compliance

Privacy, consent, and intermediary due-diligence so the platform keeps its safe-harbour protection and is ready for the DPDP regime.

Privacy policy & consent
DPDP Act readiness
Intermediary due-diligence
Grievance / nodal officers
Data-processing agreements
Cookie & tracking notices

Payments

Payments & Seller Onboarding

Structuring fund flows through authorised payment aggregators and nodal accounts, with clean seller-onboarding contracts.

Payment-aggregator structuring
Nodal / escrow accounts
Seller onboarding agreements
Seller KYC
Refund / chargeback flows
Marketplace fee structuring

Key E-Commerce Concepts You Must Know

Press Note 2

Marketplace vs Inventory

FDI is allowed up to 100% under the automatic route in the marketplace model, but inventory-based e-commerce with FDI is not permitted — a marketplace cannot own the inventory it sells or influence sale price.

100% Marketplace No FDI Inventory

Sec 9(5)

Operator GST Liability

For certain notified services supplied through a platform, the e-commerce operator — not the supplier — is liable to pay the GST as if it were the supplier.

Operator Pays Notified Services

Sec 52

Tax Collected at Source

An operator must collect tax at source on the net value of taxable supplies made by sellers through it and report this in GSTR-8 each month.

GSTR-8 Net Supplies

Sec 194-O

TDS by the Operator

An e-commerce operator must deduct income-tax at source on the gross amount of sales of goods or services facilitated for a resident seller, subject to the threshold in the section.

TDS on Sales Resident Seller

CP Rules

E-Commerce Rules 2020

Every operator must give mandatory disclosures, appoint a grievance officer, avoid manipulating listings or prices, and display country of origin and seller details.

Disclosures Grievance Officer

Metrology

Pre-Packaged Goods

Online listings of pre-packaged commodities must show MRP, net quantity, manufacturer or importer, date, and consumer-care details before sale.

MRP Display Net Quantity

Intermediary

Safe Harbour

Intermediary protection under the IT Act depends on observing due-diligence, publishing policies, appointing grievance officers, and acting on takedown requests in time.

Due-Diligence Takedown

RBI PA

Payment Aggregators

Handling customer funds requires RBI payment-aggregator authorisation or partnering with an authorised one, with money kept in escrow or nodal accounts.

RBI Authorised Escrow Account

Our E-Commerce Advisory Services

Marketplace & FDI Structuring

Model selection, entity setup, FEMA / FDI compliance, FC-GPR reporting, and group-company and downstream-investment structuring.

Consumer-Protection Compliance

Disclosures, grievance-redressal mechanism, fair-practice policies, and country-of-origin and seller-information frameworks under the 2020 Rules.

GST, TCS & Sec 9(5) Advisory

Registration, TCS collection and GSTR-8, operator-liability mapping for notified services, multi-state warehousing, and seller reconciliation.

Legal Metrology & Labelling

Packaged-commodity declarations, MRP and net-quantity display, importer / manufacturer details, and online-listing label compliance.

Data Protection & IT Act

Privacy policy, consent architecture, DPDP readiness, intermediary due-diligence, and grievance / nodal-officer appointments.

Payment-Aggregator & Escrow

Fund-flow structuring through authorised aggregators, nodal / escrow accounts, refund and chargeback flows, and fee structuring.

Seller & Vendor Agreements

Drafting onboarding, listing, logistics, and warehousing agreements with KYC, indemnity, liability, and IP-warranty clauses.

FSSAI & Sector Licences

FSSAI registration / licence for food platforms and other sector-specific registrations for regulated product categories.

Direct Tax & Sec 194-O TDS

Corporate tax planning, Section 194-O TDS compliance, tax audit, advance tax, and assessment representation.

Trademark & Brand Protection

Trademark registration, anti-counterfeiting takedowns, brand-registry support, and enforcement against infringing listings.

Internal Audit & Reconciliation

Seller-settlement reconciliation, payment-gateway and TCS reconciliation, inventory controls, and management-reporting frameworks.

Funding, M&A & Restructuring

Investment structuring, due diligence, term-sheet support, ESOPs, and group reorganisation for e-commerce ventures.

When an E-Commerce Business Needs an Advisor

Launching a Marketplace

Choosing the model, structuring the entity, and sequencing GST, consumer, metrology, and data registrations before going live avoids costly rework.

Raising Foreign Capital

FDI brings Press Note 2 conditions, seller-neutrality limits, and FEMA reporting that must be designed into the cap table before funds arrive.

Consumer-Forum Complaint

A complaint under the Consumer Protection Act or a CCPA notice for an unfair practice needs a structured, well-documented response.

GST / TCS Scrutiny

Mismatches between GSTR-8, seller returns, and settlement reports frequently trigger departmental queries requiring reconciliation and representation.

Multi-State Warehousing

Storing stock across states means fresh state-wise GST registrations and place-of-supply analysis for each fulfilment centre.

Data Breach or Privacy Notice

A breach, a user complaint, or DPDP readiness requires a privacy framework, consent records, and an incident-response plan.

Payment-Flow Restructuring

Moving to an in-house or partnered payment-aggregator model triggers RBI conditions and escrow / nodal-account compliance.

Counterfeit or IP Disputes

Infringing or counterfeit listings and brand-misuse claims need trademark enforcement and a takedown and indemnity strategy.

Documents Needed for an E-Commerce Engagement

Corporate & Regulatory

Certificate of Incorporation, MOA / AOA
GST & TCS registration certificates
FSSAI / sector licences
Legal Metrology registration
Payment-aggregator / nodal-account details
FC-GPR & FDI filings
Shops & Establishment registration

Financial & Tax

Audited financials (3 years)
Income-tax returns & assessments
GSTR-8 & TCS records
Section 194-O TDS returns
Seller-settlement reports
Payment-gateway reconciliations
GST returns & reconciliations

Operational & Policy

Seller / vendor agreements
Terms, privacy & return policies
Grievance-officer records
Product-listing & labelling data
Seller KYC documents
Data-processing agreements
Logistics & warehousing contracts

Our E-Commerce Advisory Process

Discovery & Model Review

Reviewing the business model, fund flows, and cap table, and a gap-analysis across FDI, consumer, GST, metrology, and data compliance.

Structuring & Registration

Model and entity structuring, FDI / FEMA design, and registration of GST, TCS, metrology, FSSAI, and other applicable approvals.

Policy & Documentation

Drafting seller agreements, terms, privacy and return policies, and the consumer grievance-redressal mechanism.

Compliance Implementation

Setting up TCS and TDS processes, payment and escrow flows, intermediary due-diligence, and labelling compliance.

Monitoring & Support

Periodic returns, reconciliations, renewal tracking, and representation before consumer, GST, and data authorities to keep the platform audit-ready.

Why Choose Us for E-Commerce Advisory

✓

FDI-compliant model structuring

✓

Consumer-Protection frameworks

✓

GST, TCS & Sec 9(5) mastery

✓

Legal Metrology labelling

✓

DPDP & intermediary readiness

✓

Payment & escrow structuring

✓

Seller-agreement drafting

✓

Funding & M&A support

FAQs on E-Commerce Compliance in India

Can a foreign-funded company sell its own inventory online in India?

No. Under Press Note 2 of 2018 and the FEMA Non-Debt Instruments Rules, foreign direct investment is allowed up to 100% under the automatic route only in the marketplace model — a platform that connects independent buyers and sellers. Inventory-based e-commerce, where the platform owns the goods it sells, is not open to FDI. A marketplace with FDI also cannot own the inventory, cannot let any single seller (or its group) account for a large share of sales, and cannot directly or indirectly influence the sale price. We design a model and group structure that stays within these conditions.

What is GST tax collected at source (TCS) for e-commerce operators?

An e-commerce operator must collect tax at source under Section 52 on the net value of taxable supplies made by sellers through its platform, and pay it to the government with a monthly GSTR-8 return. The seller can then claim this TCS as a credit in its own GST returns. Operators must take a separate TCS registration in every state where sellers supply through them. We set up the TCS process, file GSTR-8, and reconcile collections with seller returns.

What is Section 9(5) operator liability?

For certain notified categories of services supplied through a platform — for example, specified passenger transport, accommodation, and restaurant services — Section 9(5) makes the e-commerce operator liable to pay the GST as if it were the supplier, instead of the underlying service provider. This is different from TCS and changes who raises the invoice and discharges the tax. We map which of your supplies fall under Section 9(5) and build the correct billing and tax-payment flow.

What does an e-commerce business have to disclose under the Consumer Protection Rules?

The Consumer Protection (E-Commerce) Rules 2020 require every operator to display the seller's identity and contact details, total price with a break-up, country of origin, return / refund / exchange terms, and grievance-redressal details. The operator must appoint a grievance officer (and acknowledge complaints within the prescribed time), must not manipulate prices or listings unfairly, and must not post fake reviews. Breaches can attract action by the Central Consumer Protection Authority. We build the disclosure, policy, and grievance framework to meet these obligations.

Do online product listings need Legal Metrology labelling?

Yes. For pre-packaged commodities sold online, the Legal Metrology (Packaged Commodities) Rules require the listing to display the same mandatory declarations as the physical pack — maximum retail price, net quantity, name and address of the manufacturer / importer / packer, month and year of manufacture, and consumer-care details. Importers and manufacturers also need Legal Metrology registration. We review listings and packaging artwork and set up the registration and labelling process.

How does the DPDP Act affect an e-commerce platform?

An e-commerce platform is a data fiduciary for the personal data of its customers and must, under the Digital Personal Data Protection Act 2023, process that data on the basis of consent or another lawful basis, give a clear notice, limit use to the stated purpose, keep the data secure, and respond to data-principal rights and breaches. As an intermediary under the IT Act, it must also observe due-diligence and publish policies to keep its safe-harbour protection. We prepare a privacy policy, consent flow, and intermediary-compliance framework.

Does an e-commerce operator have to deduct TDS on seller sales?

Yes. Under Section 194-O of the Income-tax Act, an e-commerce operator must deduct income-tax at source on the gross amount of the sale of goods or services of a resident seller facilitated through its platform, subject to the threshold and rate in the section. This is separate from the GST TCS under Section 52. The seller takes credit for the TDS in its income-tax return. We set up Section 194-O deduction, deposit, and return-filing alongside the GST TCS process.

Compliant Platform. Investor-Ready Cap Table. Audit-Proof Books.

Partner with our e-commerce experts for FDI-compliant marketplace structuring, GST and TCS, consumer-protection and metrology compliance, DPDP readiness, and payment-aggregator structuring for FY 2026–27.

Talk to an E-Commerce Expert