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

An e-commerce operator has already deducted tax under serial 8(v) of section 393(1) on a sale of goods by a participant. The operator also holds a contract for the same transaction that might otherwise attract deduction under another serial of section 393. As per Note 3(d), what follows?

No further deduction is made. Once tax has been deducted under the e-commerce serial 8(v), or the transaction is exempt under the small-participant exemption, tax is not deducted on that transaction under any other provision of the Chapter. This prevents double deduction.

  1. ATax must also be deducted under the other provision, as credit will be given later
  2. BTax is not deducted on that transaction under any other provision of the ChapterCorrect
  3. CTax under 8(v) is refunded and the other provision applies instead
  4. DThe higher of the two rates applies on the same amount

Explanation

Note 3(d) says that if tax has been deducted on a transaction under serial 8(v), or the transaction is not liable for deduction under section 393(4) serial 11, tax shall not be deducted on it under any other provision of the Chapter. This avoids double deduction on the same transaction.

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