The income tax department on Thursday clarified the applicability of TDS liability of e-retailers trading through the government's ONDC initiative.

As per the FAQ issued by the Central Board of Direct Taxes (CBDT), a 1 per cent TDS will have to be deducted from the gross sale amount after including convenience/ packaging/shipping fees as charged by e-commerce trading platforms for the order placed on ONDC.

As ONDC or Open Network for Digital Commerce is a new initiative of the Department for Promotion of Industry and Internal Trade (DPIIT), the CBDT had received representations seeking clarity on who should be liable for Tax Deducted at Source (TDS) compliance under I-T laws.