Mr. Bhuvan places bulk order on ABC Marketplace Ltd., an e-commerce operator for buying 100 toasters, a product listed by DEF Seller, a partnership…

CA Final · Direct Tax Laws and International Taxation · RTP · November 2024
Mr. Bhuvan places bulk order on ABC Marketplace Ltd., an e-commerce operator for buying 100 toasters, a product listed by DEF Seller, a partnership firm. ABC Marketplace acts as Buyer-side ECO for Mr. Bhuvan as well as Seller-side ECO for DEF seller and charges a convenience fee of 10/toaster to DEF Seller. DEF Seller processes the order and charges the buyer - 1170/toaster, including packaging, shipping and convenience fees. DEF Seller pays XYZ Logistics 5/toaster for shipping, MNO retailer - 15/toaster for packaging and convenience fees of 10/toaster. DEF Seller raised invoice of 1170 per toaster. Mr. Sarthak placed an order for 500 decor wall clocks on Open Network for Digital Commerce (ONDC). These clocks are listed and owned by ABC marketplace Ltd. Mr. Sarthak made a payment of 665/ wall clock on ONDC platform via Paytm. ONDC credited - 655/ wall clock after deducting its convenience fees to ABC Marketplace Ltd. The invoice of 665/ wall clock include shipping charges of 10/ wall clock, packaging cost of 15/ wall clock and convenience fees of 10/ wall clock. From the information given above, choose the most appropriate answer of MCQs 5 to 9:
(A) Yes, tax of 1140is required to be deducted by ABC Marketplace Ltd.
(B) Yes, tax of 1170is required to be deducted by ABC Marketplace Ltd.
(C) Yes, tax of 1170is required to be deducted by DEF Seller
(D) No tax is required to be deducted as order value does not exceed - 5,00,000.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Yes, tax of 1170is required to be deducted by ABC Marketplace Ltd.

Topics: Double Taxation Relief, Assessment of Various Entities, Non-Resident Taxation

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