Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:
- Mr. Sukhdeep Singh, Former Vice President- Banking And Business Development, Oxigen Services (India) Pvt Ltd
- Mr. Shashank Chowdhury, Former Managing Director -India, Infinite Zero OR Independent Consultant
- Mr. Arun Tanksali, Co-founder & CTO, Nearex
- Mr. P D Singh, Former General Manager, Bank of Baroda
- Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous
The Union Budget 2020 proposed the introduction of a new Section 194O in the Income Tax Act, 1961 which states that an e-Commerce operator shall deduct 1 % TDS for any sale of goods or provision of services through an e-Commerce participant. Thus, e-commerce companies like Amazon, Flipkart will deduct 1% TDS from payments made to the e-commerce sellers registered with them. This newly proposed provision was introduced with the goal of widening and deepening the tax base across the country as stated by Finance Minister Nirmala Sitharaman.
Let’s understand this through a simple illustration:
Suppose X is a garment manufacturer and wants to sell his garments through a website run by ABC company, so here X is the e-commerce participant and ABC is the e-commerce operator. Now a person Y bought garments worth Rs. 2000 and paid for the same on ABC.com. Now ABC is supposed to remit Rs. 1800 to X after deducting applicable commission, service fees, etc. As per the proposed new provision, ABC will deduct Rs. 18 (1% of 1800) and pay Rs. 1782 to X.
It is to be noted that no TDS will be deducted if the e-commerce participant is not an Indian Resident and also the gross amount of sale of goods, services or both does not exceed Rs. 5 lakh and the e-commerce participant has furnished PAN/Aadhaar.
So now what FIAKS community questions here is that why should e-commerce platforms have a problem with the government budget that announced a new levy of one percent TDS on e-commerce transactions?
Then this is like a salaried person should also have a problem with the organization of deducting tax from salary payout? Isn’t it?
Here are some probable triggers for e-commerce operators;
- Additional accountability in case of errors
- Additional reconciliation with sellers
Well, the cost of compliance is a concern for e-commerce platforms
Now here’s why the newly introduced provision is a good move by the government: REGISTER and READ the complete discussions