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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, GlobalMart Ltd., an e-commerce operator, pays Rs. 3,00,000 to a participant, Anil Traders Pvt Ltd, for sale of goods on its platform, and separately earns Rs. 1,50,000 from Anil Traders for hosting advertisements unrelated to those sales, paid by Anil Traders to GlobalMart. Which statement is correct about GlobalMart's role and Anil Traders' deduction on the advertising fee?

Anil Traders must deduct tax on the advertising fee under the other applicable TDS provisions. The bar on deduction elsewhere does not extend to amounts for advertisements or other services unconnected with the platform sales, so the 0.1% e-commerce rate does not govern that fee.

  1. ANo tax can be deducted by anyone on the advertising fee because of the e-commerce deduction
  2. BAnil Traders must deduct tax on the advertising fee under the other applicable provisions, since the e-commerce precedence does not cover amounts for advertisements not connected with the salesCorrect
  3. CGlobalMart must deduct 0.1% on the Rs. 1,50,000 advertising fee
  4. DAnil Traders must deduct 0.1% on the advertising fee under Sl. No. 8(v)

Explanation

Note 3(d) bars deduction under other provisions where tax was deducted under 8(v). Note 3(e) says this bar does not apply to amounts received by an e-commerce operator for hosting advertisements or other services not connected with the sale or services covered by 8(v). So the advertising fee remains subject to the other applicable TDS provisions, and 8(v) does not apply to it.

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