The Revenue Tax division made adjustments to kind for equalisation levy to assist the cost of two% levy on digital transactions
The modified challan now has an ‘Outside India’ choice for the payee to key of their particulars and full the cost due
The equalisation levy paid by overseas MNCs, until final yr, utilized solely to digital promoting providers
International firms reminiscent of Amazon, Flipkart and Netflix might fail to adjust to the July 7 deadline for paying equalisation levy, additionally referred to as Google tax, whereas they anticipate the federal government’s clarification and the much-awaited ‘Frequently Asked Questions’ (FAQs) checklist.
On Saturday, the Revenue Tax division made adjustments to the shape used to pay equalisation levy to facilitate the cost of the two% levy on digital transactions in India by overseas e-commerce firms.
The modified challan on the web site now has an ‘Outside India’ choice for the payee to key of their particulars and full the cost due.
The federal government, by means of the Finance Act 2020, had imposed a 2% levy on digital transactions, commerce and providers by non-resident e-commerce operators with a turnover of over INR 2 crore, increasing the scope of equalisation levy, which until final yr solely utilized to digital promoting providers. The brand new levy, launched within the Union Price range, got here into impact on April 1, with the primary instalment due on July 7.
International firms are battling points reminiscent of foreign exchange conversion charges for cost and acquiring everlasting account quantity (PAN). A lot of them are actually hoping for a last-minute rest of the deadline by the federal government.
“This has rather imposed a burdensome and challenging task for non-resident e-commerce players to apply for and obtain PAN within one business day in the midst of curbs, lockdown and pandemic affected business life and also organise the mode of payment through an Indian bank account or debit card issued by an Indian Bank,” Sandeep Jhunjhunwala, accomplice, Nangia Andersen LLP instructed Financial Occasions.
US Says Digital Taxes Discriminating In opposition to American Firms
The transfer comes amid the US’ investigation of whether or not digital taxes imposed by India and 9 different nations discriminate in opposition to American firms.
The imposition of the two% levy exhibits that the Indian authorities didn’t pay heed to the illustration of overseas firms after they had requested for the levy to be deferred by a yr.
In Could this yr, overseas firms had approached the Central Board of Direct Taxes with their solutions relating to the equalisation levy imposed on them by the federal government. In line with an Inc42 report, firms had been looking for clarification about the definition of on-line sale of products, providers, and digital/digital platforms. In addition they added that the equalisation levy must be charged solely on the facilitation charge for every transaction and never on the transaction quantity as a complete, as had been determined below the brand new guidelines that went into impact in April 2020.
In 2016, equalisation levy on the fee of 6 per cent was first launched on on-line commercial providers. The federal government netted round INR 1,000 Cr from the levy in 2018-19.