Deductor: Vendor, who sells his/her products/services
Deductee: E-Commerce Operator/online
shopping website, who maintains website for listing of such
products/services e.g. Amazon, Flipkart, Snapdeal, Paytm, Myntra,
Shopclues, Alibaba, Udaan etc.
Note 1: In case e-commerce operator/website has obtained Lower Deduction Certificate (LDC)
u/s.197 of Income Tax Act,1961 , then applicable rate for TDS deduction
of that particular Assessment year would be the rate as specified in
Lower Deduction Certificate.
Note 2: Lower Deduction
Certificate u/s.197 of Income Tax Act, 1961 is applicable for
Particular Assessment Year & for that Particular Deductee – Deductor
combination.
Note 3: Validity of Lower Deduction Certificate u/s.197 of Income Tax Act, 1961, can be verified from TRACES Portal.
Note 4: Vendor/Seller
of Product/Services has to make payment of TDS on monthly basis to
government and after filing of Quarterly TDS return (Form 26Q), reimbursement of TDS deposited
has to be claimed from e-commerce operator by submitting TDS
Certificate (Form 16A). They generally prefer TDS Certificate duly
signed by Digital Signature Certificate (DSC) for prompt processing of
TDS Refund Claim.
Note 5: Request/Application
for reimbursement of TDS deposited has to be made through writing
email/login through designated ID of the vendor’s provided on e-commerce
portal. Such reimbursement is done through payment to the bank account
or through adjustment from next invoice.
Note 6: TDS is deposited on the basis of Invoices of Fees & credit note of Fees
generated by e-Commerce operator on the portal/ website, which are
generally generated on the month end date/first week of the next month.
Note 7: In case of Credit Notes of Fees
due to Sales Return/any other reason, TDS has to be deducted Net of
Credit Notes from the invoices received. In case Credit Notes remain
unadjusted in current month, then the same need to be deducted while
next month TDS deduction. (upto same financial year only)
Note 8: In case amount of commission/logistics/other fees as depicted in the above table is below amount specified
under section 194C/194H/194J, then TDS need not be deducted. Further
limit (e.g.15,000 u/s. 194H) is section wise & not Fees head wise
(i.e. combined limit by aggregating/adding up Collection Fees, Listing
Fee, Commission Fees etc would be seen u/s. 194H).
Note 9: Vendors whose constitution
is Firm/LLP/Company, they have mandatorily to deduct TDS. Individual
& HUF firms to deduct TDS only if they get their accounts audited
u/s.44AB of Income Tax Act.{ clause (a) & clause (b) of section 44AB }
Note 10: In case of Non Resident e-Commerce operator in India, TDS u/s.195 would be deducted, as section 194C/H/I/J are applicable for resident deductees only.
Note 11: Various nomenclatures
are being used by different e-commerce websites to collect these Fees
& Charges in the form of commission, advertisement & logistics
etc. Bifurcating them to section 194C/194H/194J is really difficult
task. However one may take help of SAC/HSN (as per GST Law) used in their Fees invoices for easy understanding.
Nature of Payment |
GST HSN/SAC |
GST Rate |
|
|
|
Advertisement related – 194C |
|
|
Sale of space for advertisement |
998365 |
18% |
Ad Services Fees |
998365 |
18% |
|
|
|
Logistics related – 194C |
|
|
Easy Ship Weight Handling Fee |
996812 |
18% |
Shipping Fee |
996812 |
18% |
Courier Fees |
996812 |
18% |
Same Day Delivery Fee |
996812 |
18% |
Next Day Delivery Fee |
996812 |
18% |
Removal Fee |
996812 |
18% |
Pick And Pack Fee |
996812 |
18% |
|
|
|
Commission related – 194H |
|
|
|
|
|
Nature of Payment |
GST HSN/SAC |
GST Rate |
Fixed Closing Fees |
998599 |
18% |
Listing Fee |
998599 |
18% |
Refund Processing Fee |
998599 |
18% |
Payment Collection Fees |
998599 |
18% |
Closing Fees |
998599 |
18% |
Marketing Fees |
998599 |
18% |
Collection Fees |
998599 |
18% |
Commission Fees |
998599 |
18% |
Fixed Fees |
998599 |
18% |
Fee Discount |
998599 |
18% |
Cancellation Fee |
998599 |
18% |
Service Cancellation Fee |
998599 |
18% |
Referral Fee |
998599 |
18% |
Note 12: Proposed
TDS u/s.194-O
(w.e.f. 01/10/2020) is applicable to levy a TDS of 1% on e-commerce
transactions requiring an ecommerce operator to deduct tax at the time
of credit of sale/service amount to the account of e-commerce
participant or at the time of payment thereof by any mode, whichever is
earlier. Hence this section is independent of existing TDS sections.
Further
TDS u/s.194-O is to be deducted by e-commerce operator
vis a vis. TDS u/s.194C/J/H/I as per details above is to be deducted by
vendors of e-commerce operators.Nature of Payment | Section | TDS Rate |
Shipping Fee |
194C |
2% |
Courier Fees |
194C |
2% |
Marketplace Logistics Charges |
194C |
2% |
Same Day Delivery Fee |
194C |
2% |
Next Day Delivery Fee |
194C |
2% |
Pick And Pack Fee |
194C |
2% |
Easy Ship Weight Handling Fee |
194C |
2% |
Removal Fee |
194C |
2% |
Fulfillment Centre Service |
194C |
2% |
|
|
|
Installation Fee |
194C |
2% |
UnInstallation Packaging Fee |
194C |
2% |
UnInstallation Fee |
194C |
2% |
|
|
|
Fixed Closing Fees |
194H |
5% |
Listing Fee |
194H |
5% |
Refund Processing Fee |
194H |
5% |
Payment Collection Fees |
194H |
5% |
Closing Fees |
194H |
5% |
Marketing Fees |
194H |
5% |
Marketplace Marketing Fees |
194H |
5% |
Marketplace PG Fees |
194H |
5% |
Collection Fees |
194H |
5% |
Commission Fees |
194H |
5% |
Fixed Fees |
194H |
5% |
Fee Discount |
194H |
5% |
Cancellation Fee |
194H |
5% |
Service Cancellation Fee |
194H |
5% |
Referral Fee |
194H |
5% |
|
|
|
Nature of Payment |
Section |
TDS Rate |
Storage Fee |
194IB |
10% |
|
|
|
Sale of space for advertisement |
194C |
2% |
Ad Services Fees |
194C |
2% |
Advertisement Charges/Fees |
194C |
2% |
|
|
|
Franchise Fee |
194J |
10% |
Tech Visit Fees |
194J |
10% |