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I-T dept specifies jurisdiction of officers for equalisation levy on non-resident e-commerce firms

Experts said as the first due date for payment of the equalisation levy is fast approaching, the income tax authorities seem to be working steadily towards the implementation of this new tax and chances of its deferment look bleak.

June 04, 2020 / 08:58 PM IST

The income tax department has specified the jurisdiction of officers in its international taxation wing under whom the companies would be assessed for 2 percent equalisation levy, commonly known as 'digital tax'. Over two dozen non-resident tech companies would come under the purview of the equalisation levy as proposed in 2020-21 Budget.

It came into effect from April 1, 2020 and its first instalment is due on July 7. The 2 percent tax would be levied on consideration received by e-commerce operators from e-commerce supply or services.

Experts said as the first due date for payment of the equalisation levy is fast approaching, the income tax authorities seem to be working steadily towards the implementation of this new tax and chances of its deferment look bleak.

"Equally important would be for the government to clear air on tangled issues such as need for non-resident e-commerce operators to have income tax registration in India for payment of equalisation levy, application of levy on gross consideration or commission income for platform based business models and corresponding exemption under the Income Tax Act to avoid double taxation," Nangia Andersen LLP Partner Sandeep Jhunjhunwala said.