Amazon India TDS Reimbursement Process: A Complete Seller Guide

If you sell products on Amazon India, you may have noticed TDS deductions on certain service fees like advertising or multi-channel fulfilment. Many sellers are not aware that this TDS amount can be claimed back from Amazon by following the correct reimbursement process.

 

In this detailed guide, we will explain the TDS reimbursement process on Amazon India in simple language, along with examples, required documents, and step-by-step instructions.

 

What is Tax Deducted at Source (TDS)?

Tax Deducted at Source (TDS) is a system under the Income Tax Act, 1961, where tax is deducted at the time of payment itself.

• The person who makes the payment is called the Deductor
• The person who receives the payment is called the Deductee
• The deducted tax is deposited directly with the Central Government

 

In the case of Amazon sellers, the seller is responsible for deducting TDS on certain service fees paid to Amazon, such as advertising or multi-channel fulfilment fees.

 

Which Service Fees Are NOT Subject to TDS?

As per CBDT Circular No. 20 dated 28 December 2023, if Amazon deducts 1% TDS under Section 194-O (0.1% w.e.f. 1st October 2024) on the gross sales amount, then certain service fees should NOT attract additional TDS.

 

Fees NOT subject to TDS:

• Referral fees
• Closing fees
• Listing fees
• Labelling fees
• Pick and pack fees
• Gift wrap fees
• Other marketplace-related fees

 

Fees that ARE subject to TDS:

• Advertisement fees
• Multi-Channel Fulfilment (MCF) fees

 

👉 Always consult your tax advisor to confirm applicability based on your business.

 

Simple Example to Understand TDS Reimbursement

 

Example 1: Mixed Fees Case

• Seller revenue on Amazon: ₹100
• Amazon service fees: ₹30
• Referral fee: ₹7
• Closing fee: ₹8
• Easy Ship fee: ₹5
• Advertisement fee: ₹6
• MCF fee: ₹4

 

Amazon remits ₹70 to the seller after deducting fees.

 

👉 TDS @2% applies only on ₹10 (Ads + MCF)

• TDS payable = ₹0.20 (₹10 × 2%)

 

Since Amazon already retained this amount, the seller can claim ₹0.20 as reimbursement after submitting Form 16A.

 

Example 2: TDS Applied on All Fees

If the seller deducts TDS @2% on entire ₹30 fees:

• TDS amount = ₹0.60
• Amazon will reimburse ₹0.60 after verification.

 

Why Should You Claim TDS?

Claiming TDS is important because:

• TDS deducted is your money
• It ensures tax compliance
• Avoids unnecessary financial loss
• Maintains accurate accounting records
• Helps during income tax filing

 

Once TDS is deposited with the government and supported by Form 16A, Amazon refunds the deducted amount.

 

How to Claim TDS Reimbursement from Amazon India?

Follow these simple steps to get your TDS refunded:

 

Step 1: Pay TDS to Government

• Deduct applicable TDS monthly
• Deposit it with the Central Government
• File quarterly TDS returns

 

Step 2: Generate Form 16A

• Download Form 16A from TRACES
• Ensure it is digitally signed

 

Step 3: Contact Amazon Seller Support

• Log in to Seller Central
• Create a case with subject:
  “TDS Reimbursement”

 

Step 4: Upload Form 16A

• Attach digitally signed PDF copy
• Make sure it includes:
• Amazon’s name & address
• Amazon’s PAN
• TDS amount deducted

 

Step 5: Amazon Verification

• Amazon verifies the details
• If records match, reimbursement is approved

 

Step 6: Receive Payment

• Amount is credited in your next settlement cycle
• Paid directly to your bank account

 

📌 If digital Form 16A is unavailable, submit a scanned copy signed and stamped.

 

Documents Required for Claiming TDS

Only one document is accepted:

 

Mandatory Document:

• Form 16A (TDS Certificate) generated from TRACES

 

Not Accepted:

• Bank challans
• Payment receipts

 

Ensure all details are clear and readable.

 

⚠️ Disclaimer

This article is shared on a best-effort basis to help Amazon sellers understand the TDS reimbursement process. There is no guarantee regarding accuracy, completeness, or future updates.

 

Amazon Seller Services Private Limited and its affiliates do not take responsibility for actions taken based on this information. Sellers are strongly advised to consult a qualified tax or legal professional to ensure full compliance with applicable laws.

 

Note: For the most accurate and updated details on TDS reimbursement, please refer to the official Amazon Seller Central documentation.

 

Final Words

Understanding and claiming TDS reimbursement from Amazon can save sellers a significant amount of money. If you are paying TDS on advertising or MCF fees, don’t ignore it claim it back using Form 16A.

Frequently Asked Questions (FAQs)

What is TDS reimbursement on Amazon India?

TDS reimbursement is the process where Amazon refunds the TDS amount deducted on eligible service fees after the seller submits a valid Form 16A.

Which Amazon fees are eligible for TDS reimbursement?

Only Advertisement fees and Multi-Channel Fulfilment (MCF) fees are eligible. Other marketplace fees are not subject to TDS.

Is Form 16A compulsory to claim TDS?

Yes, Form 16A generated from TRACES is mandatory. Bank challans or payment receipts are not accepted.

How do I apply for TDS reimbursement on Amazon?

Log in to Seller Central, contact Selling Partner Support, create a case with the subject “TDS Reimbursement”, and upload Form 16A.

When will I receive my TDS refund?

After verification, Amazon credits the reimbursed TDS amount in the next settlement cycle.