Central Board of Direct Taxes has issued a circular to clarify the position on deduction of TDS from e-commerce sellers selling on ONDC…
The number of sellers on ONDC i.e. Open Network Digital Commerce is continuously increasing. ONDC, which was introduced like UPI for e-commerce, is gradually gaining popularity. Meanwhile, the Tax Department has clarified the conditions regarding deduction of TDS from e-commerce sellers selling on ONDC.
TDS at the rate of 1 percent
For this, CBDT i.e. Central Board of Direct Taxes issued a new circular on Thursday. In the circular, CBDT said that TDS deduction of 1 per cent on e-commerce sales will be applicable on the total amount of sales, which also includes charges and fees collected by various e-commerce operators along with the goods and services offered on ONDC.
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This is why CBDT’s circular came
The Government of India is promoting ONDC. ONDC was first introduced in 2020. Its objective is to bring changes in the e-commerce sector in the same way as UPI has done in the case of digital transactions. Now ONDC’s network has started expanding. Many e-commerce platforms have been listed on ONDC. In such a situation, CBDT has now tried to clarify the situation by issuing a circular regarding tax deduction and tax liability.
TDS on all types of charges
According to CBDT guidelines, e-commerce platforms charge various charges on both the seller and buyer sides, which include packaging charges, shipping charges and convenience charges etc. According to CBDT, deduction of TDS will be applicable on all such charges. TDS will be deducted at the time of payment or credit by the seller side e-commerce operator. They will also have to file TDS return and issue a certificate to the seller.
TDS in case of return-replace
CBDT has also explained in the guidelines how tax will be deducted if a purchase is returned. CBDT says that TDS will definitely be deducted at the time of sale as usual. However, if a return situation arises, the deducted tax can be adjusted in another transaction during the same financial year. In case of replacement, no adjustment will be required.
