India: Treatment of tax withheld-at-source from e-commerce operations

Reports from the KPMG member firm in India about recent tax developments

Reports from the KPMG member firm in India about recent tax developments

The KPMG member firm in India has prepared reports about the following tax developments (read more at the hyperlinks provided below).

  • Standard operating system concerning refunds: The Delhi High Court issued a decision concerning coordination between the Assessing Officer and the Centralised Processing Centre in refund cases, with directions specifically concerning the strengthening of existing mechanisms and additional standard operating procedures. The case is: Intertek India Private Limited. Read a December 2021 report [PDF 322 KB]
  • Credit for withheld employee’s tax, even when employer failed to remit amounts to the government: The Gujarat High Court—concerning the credit for taxes withheld but not remitted or deposited by the employer—held that the tax department cannot deny the benefit of tax withheld-at-source to the employee, even though the tax had not been deposited by the employer. The High Court directed the tax authority to credit the employee for the amount of tax withheld. The case is: Kartik Vijaysinh Sonavane. Read a December 2021 report [PDF 330 KB]
  • Tax withheld-at-source on purchases of goods, e-commerce operators: The Central Board of Direct Taxes issued guidelines to clarify the provisions of sections 194-O, 194Q and 206C(1H) of the Income-tax Act, 1961. The clarifications concern: (1) e-auction services conducted through an electronic portal; (2) an adjustment of various indirect tax levies other than goods and services tax (GST); (3) applicability of section 194Q in instances when the exemption has been provided under section 206C(1A); and (4) applicability of the provisions of section 194Q in situations when the governmental department is not a public sector or corporation. Read a November 2021 report [PDF 304 KB]

 

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