Tds as per Sec.194o
This query is : Resolved
10 April 2021
Dear Sir
We are In The business of Mobile application for Facilitating Store sales of goods or services .Retailer are Providing Deals On Our application as exclusive deals At Our application .
Customer who want To Buy That Deals Has To Use Add To Bag Feature Available in our application .And Need To Visit Retailer Store For Availing The Offer.
We As a application Are Not aware Of Value Of Goods or Service Sold By Retailer .
Whether We Are Liable To Discharge Tds Liability Under Sec.194o ?
How To Discharge That Tds Liability When We Are Not Aware Of Sales Value ?
We are In The business of Mobile application for Facilitating Store sales of goods or services .Retailer are Providing Deals On Our application as exclusive deals At Our application .
Customer who want To Buy That Deals Has To Use Add To Bag Feature Available in our application .And Need To Visit Retailer Store For Availing The Offer.
We As a application Are Not aware Of Value Of Goods or Service Sold By Retailer .
Whether We Are Liable To Discharge Tds Liability Under Sec.194o ?
How To Discharge That Tds Liability When We Are Not Aware Of Sales Value ?
11 April 2021
Kindly elaborate the business model particularly about how the Fund transfers between your firm and seller who use your platform.
12 April 2021
we Are Promoting The Goods Or services Of Retailer On Our Platform . Retailer Can Put Their offer on Our application And Customer who want to avail that offer can avail the offer by visiting retailer store . Customer needs to make payment at retailer store directly and we are not collecting money from retailer for service to be provided by retailer . but we are collecting charges as tocken amount for selling of coupon at our platform .
19 April 2021
Assessee is a LLP working as an intermediary between Retailer and customer. Assessee collects fees from the customer and pays to Retailer with which the company has tie-up. For example: Company has tie-up with Retailer . Company collects Amount For Sell Of Coupon . Customer goes to the suggested Retailer and company pays to the Retailer directly on behalf of the customer. However, Company is only liable to pay for the services consumed by the customer Issue: Whether company is required to get registered as an E-Commerce operator? If registered as E-Commerce operator then what will be the liability to collect tax For Gst As well As Income Tax from Retailer in case Retailer are not registered under GST? Kindly clarify the GST Registration requirement
19 April 2021
Hi,
As per details provided by you, LLP is an ecommerce operator as per explanation u/s 194-O of the income tax Act 1961. 1% TDS to be deducted by LLP while paying to the Retailer.
In Case of GST, LLP being an Ecommerce Operator has to take registration under GST as E-commerce Operator and has to Collect TCS u/s 52 of the CGST Act. The TCS liability does not depend on whether Retailer is registered or not under GST.
As per details provided by you, LLP is an ecommerce operator as per explanation u/s 194-O of the income tax Act 1961. 1% TDS to be deducted by LLP while paying to the Retailer.
In Case of GST, LLP being an Ecommerce Operator has to take registration under GST as E-commerce Operator and has to Collect TCS u/s 52 of the CGST Act. The TCS liability does not depend on whether Retailer is registered or not under GST.
27 September 2021
Dear Sir
noted With Thanks .
Thanks For Reply
noted With Thanks .
Thanks For Reply
23 December 2022
How we can show Tcs of unregistered supplier in GSTR 8 for eCommerce operator?
27 July 2025
Here’s a detailed explanation about **TDS applicability under Section 194-O** for your mobile app business model and the related GST/TCS aspects:
---
### **1. What is Section 194-O?**
* **Section 194-O** was introduced to cover e-commerce operators who facilitate sales of goods/services through their digital/e-commerce platform.
* It mandates that the **e-commerce operator deducts TDS @1% on the gross amount of sales or services facilitated** through the platform, when payments are made to the seller (retailer).
---
### **2. Applicability to your business model:**
* You run a mobile app that facilitates **retailers offering deals**.
* Customers buy deals via your app but **pay the retailer directly at the store**.
* You only collect a **token amount (fees/commission)** for facilitating the sale.
* You **do not collect the full sale amount and do not pay the retailer on behalf of the customer**.
---
### **Is TDS deduction under Section 194-O required from your side?**
* **No**, if the payment by the customer is made directly to the retailer (and not routed through you), you are **not required to deduct TDS under Section 194-O**.
* The **liability to deduct TDS under Sec. 194-O arises only if the e-commerce operator receives the payment and then pays the seller**.
* Since you are **only charging a token amount (your commission) and not handling the full sale amount**, your TDS liability under 194-O applies only on your **commission income**, which you can deduct TDS on as per applicable provisions (like Section 194J for professional fees, if applicable).
---
### **3. GST and TCS (Tax Collected at Source) implications:**
* If you are an e-commerce operator, **you are required to register under GST as an e-commerce operator**.
* You are liable to collect **TCS @1% under Section 52 of the CGST Act** on the gross value of sales facilitated through your platform.
* **TCS applies irrespective of whether the retailer is GST registered or not.**
---
### **4. Summary table for your case:**
| Aspect | Your Scenario | Liability under Law |
| ----------------- | ------------------------------- | ----------------------------------------------------- |
| Payment flow | Customer pays retailer directly | No TDS under Sec. 194-O on retailer payment by you |
| Your income | Token fee/commission collected | TDS may apply on your income as per relevant sections |
| GST registration | As e-commerce operator | Mandatory |
| GST TCS liability | On gross sale value facilitated | Yes, TCS @1% under CGST Act Section 52 |
---
### **5. On reporting TCS for unregistered suppliers in GSTR-8:**
* Even if the retailer (supplier) is **unregistered under GST**, you must report TCS collected on such sales in your **GSTR-8** return.
* GSTR-8 has provisions to report TCS for both registered and unregistered suppliers.
* You can specify the details of unregistered suppliers accordingly.
---
### **Key Takeaway:**
* Since **you are not handling the full sale amount** (customer pays retailer directly), you **are not liable to deduct TDS under Section 194-O on retailer’s sales**.
* However, you must comply with **GST registration and TCS collection** requirements.
---
If you want, I can help draft a clear explanation or a compliance checklist covering TDS 194-O, GST registration, TCS filing, and how to handle unregistered suppliers in GSTR-8.
Would that be helpful?
---
### **1. What is Section 194-O?**
* **Section 194-O** was introduced to cover e-commerce operators who facilitate sales of goods/services through their digital/e-commerce platform.
* It mandates that the **e-commerce operator deducts TDS @1% on the gross amount of sales or services facilitated** through the platform, when payments are made to the seller (retailer).
---
### **2. Applicability to your business model:**
* You run a mobile app that facilitates **retailers offering deals**.
* Customers buy deals via your app but **pay the retailer directly at the store**.
* You only collect a **token amount (fees/commission)** for facilitating the sale.
* You **do not collect the full sale amount and do not pay the retailer on behalf of the customer**.
---
### **Is TDS deduction under Section 194-O required from your side?**
* **No**, if the payment by the customer is made directly to the retailer (and not routed through you), you are **not required to deduct TDS under Section 194-O**.
* The **liability to deduct TDS under Sec. 194-O arises only if the e-commerce operator receives the payment and then pays the seller**.
* Since you are **only charging a token amount (your commission) and not handling the full sale amount**, your TDS liability under 194-O applies only on your **commission income**, which you can deduct TDS on as per applicable provisions (like Section 194J for professional fees, if applicable).
---
### **3. GST and TCS (Tax Collected at Source) implications:**
* If you are an e-commerce operator, **you are required to register under GST as an e-commerce operator**.
* You are liable to collect **TCS @1% under Section 52 of the CGST Act** on the gross value of sales facilitated through your platform.
* **TCS applies irrespective of whether the retailer is GST registered or not.**
---
### **4. Summary table for your case:**
| Aspect | Your Scenario | Liability under Law |
| ----------------- | ------------------------------- | ----------------------------------------------------- |
| Payment flow | Customer pays retailer directly | No TDS under Sec. 194-O on retailer payment by you |
| Your income | Token fee/commission collected | TDS may apply on your income as per relevant sections |
| GST registration | As e-commerce operator | Mandatory |
| GST TCS liability | On gross sale value facilitated | Yes, TCS @1% under CGST Act Section 52 |
---
### **5. On reporting TCS for unregistered suppliers in GSTR-8:**
* Even if the retailer (supplier) is **unregistered under GST**, you must report TCS collected on such sales in your **GSTR-8** return.
* GSTR-8 has provisions to report TCS for both registered and unregistered suppliers.
* You can specify the details of unregistered suppliers accordingly.
---
### **Key Takeaway:**
* Since **you are not handling the full sale amount** (customer pays retailer directly), you **are not liable to deduct TDS under Section 194-O on retailer’s sales**.
* However, you must comply with **GST registration and TCS collection** requirements.
---
If you want, I can help draft a clear explanation or a compliance checklist covering TDS 194-O, GST registration, TCS filing, and how to handle unregistered suppliers in GSTR-8.
Would that be helpful?
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