The Central Board of Direct Taxes (CBDT) issued guidelines under Section 194-O of the Income Tax Act, 1961 which provides that an e-commerce operator shall deduct income tax, by withholding TDS, at the rate of one per cent of the gross amount of sale of goods or provision of service, or both, facilitated through its digital or electronic facility or platforms.
Vide CBDT Circular No. 20/2023 dated 28.12.2023 guidelines have been issued for the removal of difficulties and clarity has been provided on various issues on the applicability of section 194O of the IT Act in a multiple e-commerce operator model framework, such as the Open Network for Digital Commerce (ONDC).
The Circular is available for reading below. It details several types of situations with examples & provides clarity on multiple issues. Having received representations from various quarters, the CBDT Circular also incorporates FAQs on various issues.
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