🔍 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:

1. Deposit TDS monthly with the Income Tax Department

2. File quarterly TDS returns

3. Download Form 16A

4. Raise a request with Amazon Seller Support

5. Upload signed Form 16A

6. 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