E-commerce firms Amazon India and Flipkart are reportedly analysing the Budget proposal on levy of one percent TDS, and may speak to the government for clarifications.
“We are studying the details, and will reach out to the government for clarifications. We hope the tax regime is simple and uniform so that millions of small and medium businesses can go online, digitise their operations and continue to contribute to growing the economy,” an Amazon India spokesperson said in response to an e-mailed query to The Economic Times.
Flipkart is also likely to go through the proposal.
“We are studying the details, particularly how it impacts the MSMEs and Sellers on our marketplace platform. We will discuss further with our seller partners, and engage with government and other stakeholders in due course,” Flipkart said in its response to ET.
The Union Finance Minister Nirmala Sitaraman on Saturday proposed a new levy of 1 percent TDS (tax deducted at source) on e-commerce transactions, a move that could infalte burden on sellers on such platforms.
“In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within tax net, it is proposed to insert a new section 194-O in the Act so as to provide for a new levy of TDS at the rate of one per cent,” as per the Budget 2020-21 documents.
The amendments will come into effect from April 1, 2020.
The documents said the e-commerce operator will be charged with 1 percent TDS on the gross amount of sales or service or both. This provision will not be applicable in cases where the seller’s gross amount of sales during the previous year through e-commerce the operator is below Rs 5 lakh and the seller has already furnished his PAN or Aadhaar number.