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

Under section 393(1) Note 4, a transaction on which both serial number 8(v) (e-commerce) and serial number 8(vi) (virtual digital asset) apply for tax deduction is handled in which manner?

Tax is deducted only under serial number 8(vi), the virtual digital asset provision. Note 4 overrides Note 3 when both provisions apply to one transaction, so the e-commerce 0.1% deduction is not made and there is no double deduction.

  1. ATax is deducted at 0.1% only under serial number 8(v)
  2. BTax is deducted twice, once under each serial number
  3. CTax is deducted only under serial number 8(vi)Correct
  4. DNo tax is deducted under either serial number

Explanation

Note 4 states that where both apply, irrespective of Note 3, tax on such transaction is deducted only under serial number 8(vi), i.e. at 1% on consideration for transfer of a virtual digital asset. Deducting under 8(v) would ignore Note 4 and double deduction is not provided.

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