Amazon India and Flipkart are studying the Budget proposal to levy one per cent TDS, and may reach out to the Centre for clarifications.

“We are studying the details, and will reach out to the government for clarifications. We hope the tax regime is simple and uniform so that millions of small and medium businesses can go online, digitise their operations and continue to contribute to growing the economy,” an Amazon India spokesperson said in response to an e-mailed query.

Flipkart also said it was going through the proposal. “We are studying the details, particularly how it impacts the MSMEs and sellers on our marketplace platform. We will discuss further with our seller partners, and engage with government and other stakeholders in due course,” Flipkart said in its response.

The government on Saturday proposed a new levy of 1 per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase burden on sellers on such platforms.

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

The amendments will take effect from April 1.

The documents said the e-commerce operator will have to deduct 1 per cent TDS on the gross amount of sales or service or both. This provision will not apply in cases where the seller’s gross amount of sales during the previous year through e-commerce operator is less than ₹5 lakh and the seller has furnished his PAN or Aadhaar number.