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

Dhanvi Exchange Ltd. is an e-commerce operator. A resident buyer pays Rs. 6,00,000 for a virtual digital asset sold through its platform, entirely in cash, and the sale falls under both serial 8(v) and serial 8(vi) of section 393(1). Tax deductible is:

Tax of Rs. 6,000 is deducted. When a transaction attracts both the e-commerce provision and the virtual digital asset provision, only the VDA provision applies, at 1%. So 1% of Rs. 6,00,000 gives Rs. 6,000, with no additional 0.1% deduction.

  1. ARs. 600 under 8(v) only
  2. BRs. 6,600 as the sum of 0.1% and 1%
  3. CRs. 6,000 under 8(vi) onlyCorrect
  4. DRs. 600 and Rs. 6,000 separately as two deductions

Explanation

Note 4 says that where both 8(v) and 8(vi) apply, tax is deducted only under 8(vi), at 1%. 1% of Rs. 6,00,000 = Rs. 6,000. Adding the two rates, or deducting twice, is wrong because only one provision operates.

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