Skip to content

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

Under the Income-tax Act, 2025, at what rate must an e-commerce operator deduct tax at source on the gross amount of sale of goods or services by an e-commerce participant facilitated through its platform, where no exemption applies?

The rate is 0.1% of the gross amount of sales or services facilitated through the platform. Section 393(1) serial 8(v) fixes this rate for e-commerce operators with no threshold, unlike the 1% rate for virtual digital assets or the 2% rate for contractors.

  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 serial 8(v), requires an e-commerce operator to deduct tax at 0.1% of the gross amount of sales or services or both, with a nil threshold. The 1% rate applies to virtual digital asset transfers, and 2% applies to contractor payments and similar items, so neither fits.

Did you get it right without looking?

One question tells you little. A timed set on E-commerce Transaction and Liability in Special Cases shows your real accuracy, how long you take and where you lose marks.

Practise E-commerce Transaction and Liability in Special CasesFree diagnostic mock

More E-commerce Transaction and Liability in Special Cases questions