CBDT guidelines about the applicability of TDS liability for online retailers on ONDC

In accordance with Section 194-O, e-commerce operators are obligated to deduct 1% of the gross sales amount inclusive of convenience, packaging, and shipping fees imposed by e-commerce trading platforms.

Circular No. 20 of 2023, dated 28-12-2023 from the CBDT outlines the procedure for tax deductions in specific transactions, with particular emphasis on scenarios involving multiple e-commerce operators and Open Network for Digital Commerce.

Given that the Open Network for Digital Commerce (ONDC) is a nascent initiative of the Department for Promotion of Industry and Internal Trade (DPIIT), the CBDT has been presented with petitions requesting clarification regarding the parties accountable for ensuring compliance with I-T laws regarding Tax Deducted at Source (TDS).

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AO cannot alter the nature of the payment to be subjected to a different TDS provision during the appeals process: HC

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