Budget 2021

E-commerce cos to collect 1% TDS from sellers under new levy

PTI New Delhi | Updated on February 01, 2020

The government on Saturday proposed a new levy of one per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase the burden on sellers on such platforms.

“In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within the tax net, it is proposed to insert a new section 194-O in the Act to provide for a new levy of TDS at the rate of one per cent,” as per 2020-21 Budget documents.

Also, consequential amendments are being proposed in section 197 (for lower TDS), in section 204 (to define person responsible for paying any sum) and in section 206AA (to provide for tax deduction at 5 per cent in non-PAN/Aadhaar cases).

The amendment will take effect from April 1, 2020.

The document explained that e-commerce operator -- an entity owning, operating or managing the digital platform -- would have to deduct one per cent TDS on the gross amount of sales or service or both.

E-commerce companies were yet to respond to queries seeking inputs on the levy.

This provision will not apply in cases where the seller’s gross amount of sales during the previous year through the e-commerce operator is less than Rs 5 lakh and has furnished his PAN or Aadhaar number.

Published on February 01, 2020

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