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

Under the Income-tax Act, 2025, an e-commerce operator facilitates sales by an e-commerce participant through its platform. At what rate must the operator deduct tax on the gross amount of such sales or services?

The e-commerce operator deducts tax at 0.1% of the gross amount of the sales or services facilitated through its platform, with a nil threshold. The 1% rate belongs to virtual digital asset transfers, so it does not apply to ordinary e-commerce sales.

  1. A0.1% of the gross amountCorrect
  2. B1% of the gross amount
  3. C2% of the gross amount
  4. D10% of the gross amount

Explanation

Section 393(1) Table, Sl. No. 8(v), requires an e-commerce operator to deduct tax at 0.1% of the gross amount of sale of goods or services facilitated through its platform, with no threshold limit. The 1% rate applies to transfer of a virtual digital asset (Sl. No. 8(vi)), not to e-commerce sales.

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