As a recently qualified CA, during my articleship, I encountered multiple clients operating as e-commerce aggregators or sellers. Now, in practice, a recurring challenge is the interplay between Section 194-O (TDS by e-commerce operators) and Section 206C(1H) (TCS on sale of goods). Specifically, when an e-commerce operator collects payment from the buyer and then remits it to the e-commerce participant (seller), Section 194-O mandates TDS. However, if the e-commerce participant (seller) is also selling goods and exceeds the specified turnover, they might be liable for TCS under Section 206C(1H).
My question is: In a scenario where the e-commerce operator is already deducting TDS under 194-O from the payment made to the e-commerce participant, does the participant still need to collect TCS under 206C(1H) from their buyers (if direct sales are also happening and turnover criteria are met), or is there an exemption/priority rule that overrides one of these provisions for transactions routed through the e-commerce platform? I’m trying to ensure my advice aligns with the latest ICAI guidance and CBDT circulars on avoiding double taxation or conflicting compliance obligations.