TDS ON AMAZON SELLER INVOICE

The question of TDS on Amazon seller invoices involves two distinct parts: TDS deducted by Amazon on your sales, and TDS you may be required to deduct on fees charged by Amazon.

1. TDS Deducted BY Amazon (Section 194-O)

Amazon is required to deduct TDS under Section 194-O at the rate of 0.1% (as of current regulations) on the gross amount of sales facilitated through their platform.

• Purpose: This acts as an advance tax payment in your name.

• Visibility: You can see these deductions reflected in your Form 26AS or Annual Information Statement (AIS).

• Certificate: Amazon issues Form 16A quarterly, which you can download from your Seller Central account under Reports > Manage taxes.

2. TDS on Fees Charged BY Amazon (Marketplace Fees)

Per CBDT Circular No. 20/2023 (dated December 28, 2023), there is significant relief regarding the TDS you previously had to deduct on marketplace fees.

• General Rule: Marketplace fees (such as listing fees, closing fees, labeling fees, and pick-and-pack fees) are generally not subject to TDS if they are connected to the main transaction of sale of goods/services and are included in the gross amount on which Amazon already deducts 194-O TDS.

• Exceptions: Advertisement fees and Multi-Channel Fulfilment (MCF) fees are typically still considered separate services and may remain subject to TDS requirements.

• Action Required: Because of the complex nature of these tax laws and frequent circular updates, it is strongly recommended that you consult your tax advisor or Chartered Accountant (CA) before finalizing your accounting entries. They can confirm which specific line items in your Amazon invoice currently require TDS based on your specific business structure.

Summary for your Records

• TDS on Sales (194-O): Amazon handles this automatically. You do not need to deduct it; you only need to ensure you claim credit for it in your ITR.

• TDS on Amazon Fees: Following the December 2023 CBDT circular, most marketplace service fees are exempt from TDS. However, verify the treatment of Advertisement and MCF fees with your tax consultant.

• Reimbursement: If you mistakenly deducted TDS on fees that are actually exempt, or if you are required to deduct TDS on specific services (like ads), you must follow the formal TDS reimbursement process via Seller Central by submitting a valid Form 16A to Amazon.