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

During the tax year, Kaveri Handlooms, a partnership firm, sold goods worth Rs. 8,00,000 through the platform of ShopBharat Ltd., an e-commerce operator. Of this, buyers paid Rs. 2,00,000 directly to Kaveri Handlooms and Rs. 6,00,000 through ShopBharat. What is the tax ShopBharat must deduct under section 393(1), Sl. No. 8(v)?

ShopBharat must deduct Rs. 800, being 0.1% of the full gross sales of Rs. 8,00,000. Amounts paid directly by buyers to the participant are deemed paid by the operator and are included in the gross amount, so Rs. 600 is wrong.

  1. ARs. 600
  2. BRs. 800Correct
  3. CRs. 8,000
  4. DRs. 6,000

Explanation

Note 3(b) deems direct payments by buyers to the participant to be paid by the operator and includes them in the gross amount. Gross amount = 2,00,000 + 6,00,000 = Rs. 8,00,000. Tax = 0.1% x 8,00,000 = Rs. 800. Rs. 600 wrongly ignores the direct payments. Kaveri is a firm, so the small-individual exemption does not apply anyway.

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