Dear Seller,
As you may know, the Indian Parliament has by the Finance Act, 2020, inserted a new Section 194-O in the Income Tax Act, 1961 which provides that:
- All e-commerce entities facilitating sale of goods or supply of services of e-commerce sellers shall be liable to deduct tax at source (“TDS”) on the gross amount of such sales or services paid or credit to e-commerce sellers. The provisions are effective October 1, 2020.
- The TDS will be deducted for all Indian resident sellers where the gross sales of the goods or services during the financial year is more than INR 500,000.
- From April 1, 2021, the TDS rate is 1% on the gross sales of goods or services. The TDS rate is 20% if seller has not provided PAN or where the PAN is not operational.
- To that effect, eBay has deducted and paid TDS to the income tax authorities on your behalf every month. eBay debits the monthly TDS before 10th of every month for the previous month’s gross sales.
Effective May 1, 2022, eBay shall deduct the TDS on each transaction from your sales proceeds. The remaining sale proceeds shall be transferred to your Payoneer account. The last monthly deduction of TDS will be processed in the month of May 2022 for the month of April 2022.
Illustration: If the buyer pays for eBay seller’s transaction on 1 May and subsequently eBay receives confirmation of successful payment, eBay will deduct 1% TDS. This deduction will reflect in eBay seller’s Seller Hub along with other fees.
Transaction Listing price of product : USD 1,000.00
Shipping/tax (if applicable) : USD 20.00
Total cost visible to buyer : USD 1,020.00
Buyer pays to eBay : USD 1,020.00
Less :
Applicable eBay fees : USD 100.00
Net sale proceeds available to eBay seller : USD 920.00
Less : TDS @1% (on the total cost paid by buyer) : USD 10.20
Net amount sent to Payoneer account : USD 909.80
(all amounts are for understanding purpose)
The net amounts are available for eBay to transfer to eBay seller’s Payoneer account and, from there, to eBay seller’s bank account.
Please note that if the PAN is wrongly updated, eBay will deduct 20% of each transaction (instead of 1%).
TDS will be deducted effective 1 April 2022 period onwards.
eBay will continue to deposit accumulated TDS with the income tax authorities every month as per the scheduled date.
The periodic deducted TDS amounts will be available in seller hub panel to view and download.
Please visit https://sellglobal.ebay.in/payments/tds_faq.html for more details and FAQs.
Regards
eBay India CBT team
