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CMA Final · Direct Tax Laws and International Taxation · E-commerce Transaction and Liability in Special Cases

An e-commerce operator facilitates a transaction in which a seller, Mohan HUF, sells goods for Rs. 3,00,000 on the platform, without furnishing PAN or Aadhaar. Gross sales for the tax year are Rs. 3,00,000. What is the position on TDS?

Tax of Rs. 300 is deducted at 0.1% of Rs. 3,00,000. The exemption for individuals or HUFs with gross sales up to Rs. 5,00,000 needs PAN or Aadhaar to be furnished, and since it was not, the operator must deduct tax.

  1. ATax of Rs. 300 is deducted at 0.1%, as the PAN or Aadhaar condition is not metCorrect
  2. BNo tax is deducted as sales are below Rs. 5,00,000
  3. CTax of Rs. 3,000 is deducted at 1%
  4. DTax is deducted only if sales exceed Rs. 50 lakh

Explanation

The no-deduction table (serial 11) needs all three conditions: individual or HUF, gross sales not above Rs. 5,00,000, and PAN or Aadhaar furnished. The third is missing, so the exemption fails. Tax is 0.1% of Rs. 3,00,000 = Rs. 300. The option claiming no tax overlooks the PAN or Aadhaar condition.

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