CBDT issued Guidelines on Section 194-O for E-commerce Operators, Addressing Clarity and FAQs in Multiple Operator Models like ONDC
The CBDT vide Circular No. 20/2023 dated December 28, 2023, has issued guidelines addressing challenges and providing clarity on the application of section 194-O of the Income-tax Act, 1961, particularly in a multiple e-commerce operator model such as the Open Network for Digital Commerce (ONDC). Section 194-O mandates that an e-commerce operator deducts income tax at a rate of one percent on the gross amount of sale of goods or provision of services facilitated through its digital or electronic platform. The circular comprehensively outlines various scenarios with illustrative examples, offering insights and resolving concerns raised by different stakeholders. Additionally, the Circular incorporates Frequently Asked Questions (FAQs) to further enhance understanding and address a spectrum of issues raised through representations from various quarters.