Equalisation Levy – e-Commerce and Others
Table of Contents
EQUALISATION LEVY – OTHER THAN E-COMMERCE OPERATOR
What is Equalisation Levy
With the increase in electronic / digital transaction, taxation may be difficult if the buyer and seller are from different countries or say different tax jurisdiction. Equalisation Levy – e-Commerce and Others
In order to tackle the issue of transaction in information technology domain, equalisation levy has been introduced.
Date of enforcement of Equalisation Levy
Equalisation levy commences rom 1st June, 2016.
Further, equalisation levy on e-commerce operators commences from 1st April 2020.
Rate of Equalisation Levy
The rate of equalisation levy is 6% of the amount of consideration.
What is specified Service in Equalisation levy
‘Specified Services’ means online advertisement, any provision for digital advertising space or any other facility or services for the purpose of online advertisement and includes any other services as may be specified by Central Government.
Where Equalisation levy is not applicable
Equalisation levy is not applicable in following cases:
- If the aggregate amount of consideration doesnot exceed Rs 1 Lakh in any financial year
- If non-resident service provider has a permanent establishment in India and the income from such specified services is connected to this PE in India
- Where the payment by Indian resident towards specified services is not for the purpose of carrying out Business or Profession
Time limit for payment to Government
The amount collected towards equalisation levy has to remitted by 7th of the next month. For example if equalisation levy is collected in December 2020, then it has to be remitted by 7th January 2021
What is the liability if equalisation levy is not collected
The payer is liable to pay to the credit of Government, even though, equalisation levy has not been deducted.
Responsibility of furnishing Statement / Return
Payer responsible for deduction has to furnish Statement No 1 in respect of specified services
Time limit for furnishing Statement / Return
The taxpayer has to file Statement no 1 within 30th June immediately following the financial years. For example, Statement for the financial year 2020-21 has to be filed by 30th June 2021
Consequence of delay in depositing Equalisation Levy
The person responsible has to be pay simple interest of 1% for every month of delay
Penal consequences of Equalisation Levy
The person responsible for compliance of equalisation levy has to pay penalty in case of following non-compliances:
Failure due to:
- Deduct Equalisation Levy: A penalty amount equal to equalisation levy.
- Deposit Equalisation Levy with Government: Rs 1000/- for each day of delay.
- Furnish Statement: Rs 100/- for each day of delay
EQUALISATION LEVY ON E-COMMERCE OPERATOR
What is e-commerce operator
e-Commerce operator means a non-resident who owns, manage and operators an e-commerce platform for supply of goods or services or both.
What is Online Supply or Services
Online Supply or Services means:
- Online Sales of goods or Services by e-commerce operator
- Sales or supply of goods/services duly facilitated by e-commerce operators
Date of enforcement of Equalisation Levy on e-commerce Operator
Equalisation levy on e-commerce operators commences from 1st April 2020.
Rate of Equalisation Levy
The rate of equalisation levy is 2% of the amount of consideration received by an e-commerce operator from e-commerce supplier of goods/services.
Also read:
- Cost Inflation Index (CII)
- House Rent Allowances
- Tax Compliances in FY 2021-22
- TRACES FAQs–General TDS
