{"id":16501,"date":"2020-09-17T15:16:21","date_gmt":"2020-09-17T09:46:21","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=16501"},"modified":"2021-11-11T14:20:24","modified_gmt":"2021-11-11T08:50:24","slug":"tds-applicable-on-payments-made-to-e-commerce-operators","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/tds-applicable-on-payments-made-to-e-commerce-operators\/","title":{"rendered":"TDS Applicable on Payments made to E-Commerce Operators"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Finance Act, 2020 has established a new <strong><em>Section 194-O<\/em><\/strong> that elaborates on levying 1% Tax Deducted at Source on Payments made to E-Commerce operators that will be applicable for the transactions from 1st October 2020. In this blog, we will talk about <a href=\"https:\/\/corpbiz.io\/tds-return-filing\"><strong>TDS<\/strong><\/a> Applicable on payments made to E-commerce operators.<\/p>\n\n\n\n<p>Section 194-O should be applicable on Residents or Non-Resident E-commerce operators making payment to resident e-commerce platform in relation to sale of goods and services consisting of digital products like E-book, blogs, podcasting, audio-video etc. aids through its digital or electronic facility or platform.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/tds-applicable-on-payments-made-to-e-commerce-operators\/#Who_is_an_E-commerce_operator\" >Who is an E-commerce operator?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/tds-applicable-on-payments-made-to-e-commerce-operators\/#Previous_Scenario_of_TDS_Applications_on_Payments_made_to_E-Commerce_Operators\" >Previous Scenario of TDS Applications on Payments made\nto E-Commerce Operators<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/tds-applicable-on-payments-made-to-e-commerce-operators\/#Situations_when_TDS_is_not_Deducted\" >Situations when TDS is not Deducted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/tds-applicable-on-payments-made-to-e-commerce-operators\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_an_E-commerce_operator\"><\/span>Who is an E-commerce operator?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>E-Commerce operator is a person who holds, manages or\noperates a digital or electronic facility for the sale of goods and services.\nThey are responsible for making payments to any E-Commerce participant on sale\nof such products.<\/p>\n\n\n\n<p>An E-commerce participant means any person who owns, manages or operates digital or electronic facility or platform for E-commerce and is in charge for paying to E-commerce participants, like- Amazon, <strong><em>Flipkart<\/em><\/strong><sup><a href=\"https:\/\/www.flipkart.com\/\"><strong><em>[1]<\/em><\/strong><\/a><\/sup>, Facebook, Myntra etc.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/tds-under-section-194n-of-income-tax-act-cash-withdrawal\/\">Latest guide on TDS under Section 194N of Income Tax Act: Cash Withdrawal<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Previous_Scenario_of_TDS_Applications_on_Payments_made_to_E-Commerce_Operators\"><\/span>Previous Scenario of TDS Applications on Payments made\nto E-Commerce Operators<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before the introduction of Section 194-O, there was no tax deduction on payments made to any E-Commerce operator. It was mandatory for them to file their income tax return independently. Consequently, many small E-Commerce operators did not file their <a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>Income-tax Return<\/strong><\/a> and avoided tax liability.<\/p>\n\n\n\n<p>According to Section 194-O, E-commerce operators will deduct TDS @ of 1% on the total amount of sale of goods or services assisted by any E-commerce operators through digital or electronic means to the participants of the E-commerce. The TDS applicable on payments made to E-commerce operators or payment by any mode where the purchaser of goods and services makes payment directly to any e-commerce participants.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Situations_when_TDS_is_not_Deducted\"><\/span>Situations when TDS is not Deducted<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The TDS under Section 194-O will not be deducted in two cases-<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"580\" height=\"343\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-72.png\" alt=\"Situations when TDS is not Deducted\" class=\"wp-image-16517\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-72.png 580w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-72-300x177.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">An Individual or HUF <\/h3>\n\n\n\n<p>Any individual or Hindu Undivided Family only, where the total\ngross sale of goods and services or both not likely to exceed INR 5 Lakhs\nduring the fiscal year; and such person has PAN or aadhar linked to the E-commerce\noperator, the TDS under section 194-O @ 1% cannot be deducted.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Under Section 194-O<\/h3>\n\n\n\n<p>No TDS will be deducted if any payment that is covered under\nSection 194-O will not be liable to TDS under any other provision of the Act.\nMorepver, the TDS will be deducted @ 1% on the total amount of sales or services.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Section 206AA now provides that if PAN or Aadhaar is not available, then tax will be deducted @ 5% instead of 1%. Section 194-O states that when paying GST at the time of credit to the party or making any payment, whichever is earlier then tax will be deducted according to Section 206 AA. Therefore introduction of Section 194O will result in an increase in the revenue by reducing tax evasion for the government. The Finance Act, 2020 has established the new <strong><em>Section 194-O<\/em><\/strong> that elaborates on levying 1% TDS applicable on payments made to E-commerce operators.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/benefits-of-tds-return-filing-in-india\/\">All about Benefits of TDS Return Filing in India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Finance Act, 2020 has established a new Section 194-O that elaborates on levying 1% Tax Deducted at Source on Payments made to E-Commerce operators that will be applicable for the transactions from 1st October 2020. In this blog, we will talk about TDS Applicable on payments made to E-commerce operators. Section 194-O should be [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":16513,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[153,237],"tags":[1008],"acf":{"service_id":"51"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":10807,"readingTime":2,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16501"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=16501"}],"version-history":[{"count":13,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16501\/revisions"}],"predecessor-version":[{"id":24457,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/16501\/revisions\/24457"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/16513"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=16501"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=16501"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=16501"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}