Final ONDC seller to be liable for TCS, CBDT clarifies

New Delhi, Dec 28, 2023

Synopsis
In detailed guidelines, the CBDT said TCS will be collected on the gross amount charged to the customer. In case the buyer receives a discount, the TCS will be on the final invoice raised to the buyer irrespective of whether the first e-commerce operator is offering the discount or the second. The CBDT also said in case of purchase of goods which are not under the purview of Goods and Services Tax, the TDS will be applicable on the amount without including state levies, VAT or other tax.

If multiple e-commerce operators are involved in a single transaction, the responsibility of compliance will lie with the operator which receives the final payment, the Central Board of Direct Taxes (CBDT) clarified on Thursday. This will put an end to a large number of disputes faced by e-commerce operators on Open Network for Digital Commerce (ONDC), especially small retailers in utilising digital commerce.

In detailed guidelines, the CBDT said TCS will be collected on the gross amount charged to the customer.

In case the buyer receives a discount, the TCS will be on the final invoice raised to the buyer irrespective of whether the first e-commerce operator is offering the discount or the second.

The CBDT also said in case of purchase of goods which are not under the purview of Goods and Services Tax, the TDS will be applicable on the amount without including state levies, VAT or other tax.

Section 194-O of the Income-tax Act, 1961 provides that an e-commerce operator deduct tax at the rate of 1% of the gross amount of sale of goods or provision of service, or both, facilitated through its platform.

However in the case of ONDC, where multiple e-commerce operators were involved, there was no clarity on who will collect tax.

[The Economic Times]