New Delhi
In a bid to provide a level-playing field, the government has decided not to levy 2% digital service tax if goods and services are sold through Indian arm of foreign e-commerce players.
The amendment to Finance Bill 2021 clarifies that offshore e-commerce platforms don’t have to pay 2% equalisation levy if they have permanent establishment or they pay any income tax here. However, foreign companies who are not paying any tax will have to pay.
The digital tax introduced in April 2020, applies only to non-resident companies with annual revenues in excess of Rs 2 crore, and covers online sales of goods and services to Indians.
“Through the government amendment... I intend to clarify that this equalisation levy is not applicable on consideration for goods which are owned by Indian residents,” Finance Minister Nirmala Sitharaman had said replying to a debate Finance Bill 2021 in Lok Sabha.
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