Dear All
My question relates to E-Commerce Business Concept wherein Users are provided with facilities of Online Recharges, Postpay Bill Payments & the like.
Suppose, Company A pays Rs.1000/- to Airtel for talktime bought in its account & receives Rs.1040/- worth of talktime (4% being Company A's share of Commission for this purchase). Now Company A provides Online Recharge to one of its retailers & receives Rs.1000/- in cash & in return gives Rs.1025/- worth of talktime to him (2.5% being retailer's share of commission). Thus, instead of providing commission separately, the same is given as excess talktime which can be used by the buyer of talktime anyway he wants.
My question is - (1) is this selling & buying of talktime transaction is a regular sale/purchase transaction; considering the "talktime" as commodity in this case or is it a service? (2) what is the effect of commission given as a part of it? It is not separately given. Is it subjected to TDS? (3) what book entry to pass in books of Company A?
Please Advise.
CAclubindia
