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

Meera Textiles, a partnership firm, sold goods worth Rs 3,00,000 during the tax year through the platform of ShopKart Ltd, an e-commerce operator. Meera Textiles has furnished its PAN to ShopKart Ltd. Buyers paid ShopKart Ltd, which remits the sale proceeds to Meera Textiles. What tax should ShopKart Ltd deduct under section 393(1), Table Sl. No. 8(v)?

ShopKart Ltd must deduct Rs 300, which is 0.1% of Rs 3,00,000. The Rs 5,00,000 exemption is available only to an individual or HUF participant who furnishes PAN or Aadhaar. A partnership firm does not qualify, so the standard 0.1% deduction applies.

  1. ANil, because gross sales are below Rs 5,00,000
  2. BRs 300, being 0.1% of Rs 3,00,000Correct
  3. CRs 3,000, being 1% of Rs 3,00,000
  4. DRs 6,000, being 2% of Rs 3,00,000

Explanation

The no-deduction exemption in section 393(4), Sl. No. 11 applies only if the participant is an individual or HUF, with gross sales up to Rs 5,00,000 and PAN or Aadhaar furnished. A firm is not an individual or HUF, so the exemption fails. Tax is 0.1% x 3,00,000 = Rs 300. Option A wrongly ignores the individual/HUF condition.

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