The Open Network for Digital Commerce (ONDC) lauds the recent guidelines from the Central Board of Direct Taxes (CBDT) introducing a 1% income tax deduction on the total sales facilitated by e-commerce firms within a multi-operator model framework. These guidelines, outlined in Section 194-O of the Income Tax Act, 1961, mandate a 1% deduction on the gross amount from goods or services sold via digital platforms.
Clarity for ONDC Ecosystem Participants:
As per ONDC, these guidelines provide clarity to participants in the ONDC ecosystem, ensuring a thorough comprehension and adherence to tax obligations. The framework aims to streamline operations and improve compliance for digital transactions, especially in instances involving multiple entities within the digital commerce network.
ONDC stated, “We believe that by providing clarity on the application of Sec 194-O to network models of digital trade where multiple ecommerce entities are involved, these guidelines will contribute to the ease of doing business on the ONDC network and strengthen the compliance framework for digital transactions.”
The CBDT, in a statement, highlighted the purpose of their circular guidelines: “CBDT Circular guidelines have been issued for removal of difficulties and clarity has been provided on various issues pertaining to applicability of Section 194-O of the Act in a multiple ecommerce operator model framework, such as the Open Network for Digital Commerce.”
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