CBDT issues guidelines on 1% tax deduction by ecommerce operators
According to Section 194-O of the Income-Tax Act, 1961, an e-commerce operator shall deduct income tax at the rate of 1% of the gross amount of sale of goods or provision of service, or both, facilitated through its platform
Circular guidelines have been issued for removal of difficulties and clarity has been provided on various issues pertaining to applicability of the Act in a multiple e-commerce operator model framework, such as the Open Network for Digital Commerce (ONDC)
The Central Board of Direct Taxes (CBDT) on December 28 issued guidelines on issues of deduction of 1 percent income tax of the gross amount of sale of goods or services by e-commerce companies in a multiple-operator model framework.
According to the Section 194-O of the Income Tax Act, 1961 (‘the Act’) an e-commerce operator shall deduct income tax at the rate of 1 percent of the gross amount of sale of goods or provision of service, or both, facilitated through its digital or electronic facility or platform.
“Circular guidelines have been issued for the removal of difficulties and clarity has been provided on various issues on the applicability of the Act in a multiple e-commerce operator model framework, such as the Open Network for Digital Commerce (ONDC),” CBDT said in a statement.
The circular details several types of situations with examples and provides clarity on multiple issues. Having received representations from various quarters, the circular incorporates frequently asked questions on varied issues.
