Equalisation levy & Amendment by Union Budget 2021
Government had imposed in the last year a 2% tax on the sale of goods and services that take place through non-resident digital operators having an annual turnover or sales of more than Rs 2 crore.
3 more amendment / clarifications have been carried out in this budget on Equalisation levy:
- Services which are subject to tax as royalty or fees for technical services under the Income Tax Act will be out of the ambit.
- a. Non resident E Com operator would be subject to the levy for the supply of goods or services for any of these activities-
Acceptance of the offer for sale, placing the purchase order, acceptance of the purchase order, payment of consideration and supply of goods or provision of services, partly or wholly.
- Thus if an overseas hotel is merely taking online payments, it might get hit by the provisions.
- Payment gateways may also be coming under these provisions.
3. Entire value of goods or services would be taxed even where the aggregator or the e commerce marketplace is merely facilitating the transaction for another vendor. Thus, Alibaba will have to pay a levy on the entire sale amount and not just the commission
