TDS on Amazon Platform Charges 💸|Top 5 Hidden Truth Revealed!
ECOMMERCE BUSINESS
7/25/20252 min read
🔍 Amazon & TDS: 5 Hidden Truths Every Seller Must Know!
By CA M.F. Khan | M.F. Khan & Associates
Experts in E-Commerce Taxation, GST, UAE Corporate Tax, and International Compliance
Are you an Amazon seller puzzled about TDS (Tax Deducted at Source)?
A common question among online sellers is:
“Who is responsible for deducting TDS – Amazon or the Seller?”
This blog unpacks the 5 Hidden Truths under the Indian Income Tax Act that every Amazon seller should know to avoid penalties, interest, or disallowance of expenses.
🔥 1. TDS Deducted by Amazon ≠ Your Own TDS Obligations
Even though Amazon deducts 0.1% TDS u/s 194-O on gross sales (including if you're not profitable!), sellers still need to deduct TDS on Amazon platform fees such as:
Advertising
Multi-Channel Fulfillment
Warehousing
Logistics charges
These fall under Section 194J / 194C, not 194-O!
🚨 2. Missing TDS = Expense Disallowance + Penalty
If sellers fail to deduct and pay TDS on Amazon’s service charges, consequences may include:
Expense disallowed under Section 40(a)(ia)
Interest and penalty imposed
Real case: ₹5 lakh commission disallowed in tax audit due to non-deduction!
❗ 3. Amazon Deducts TDS Even if You’re Below Tax Limit
Many small businesses and startups assume no TDS applies if income is below the taxable limit — this is a costly myth.
Amazon deducts 0.1% TDS on all sales, regardless of the seller's profit status or exemption threshold.
🔄 4. Amazon Global (Amazon.com) – No TDS u/s 194-O
If you're selling on Amazon Global (non-resident platform):
Section 194-O does not apply
But you may need to deduct TDS u/s 195 on cross-border services
Amazon fees may qualify as OIDAR or import of service under GST and must be disclosed in GSTR-3B under RCM
🧾 5. Claiming Your TDS from Amazon – Step-by-Step
Here's how to recover the TDS deducted by Amazon:
Deposit TDS monthly with the Income Tax Department
File quarterly TDS returns
Download Form 16A
Raise a request with Amazon Seller Support
Upload signed Form 16A
Wait for reimbursement – credited in the next payment cycle
🎯 Practical Tip: Multiple TDS Sections Can Apply!
Your single invoice from Amazon may attract TDS under multiple sections — be cautious and classify charges correctly.
📌 Final Thoughts
TDS compliance in e-commerce is complex but non-negotiable.
Ignoring it can lead to heavy financial and legal consequences.
At M.F.Khan & Associates, we help Amazon sellers ensure full compliance with Income Tax, GST, and International Trade Laws.
📞 Need Help?
✅ Amazon Seller Taxation
✅ TDS Filing & Advisory
✅ GST on Import of Services
✅ USA/UK/UAE E-Commerce Setup
📧 Email: mfkhan.associates@gmail.com
🌐 Visit: www.camfkhan.com
