MUMBAI: The proposed withdrawal of the 2% equalisation levy (EL) provides relief to non-resident digital companies, as the consideration received or receivable for e-commerce supply or services or or after Aug 1, 2024 will not be subject to this tax.
For example, a foreign entity selling music or a book to a customer online will now not have to pay this tax.However, this now casts a compliance burden on the Indian customer.
Mitesh Jain, partner, Economic Laws Practice, said, “The Indian customer purchasing goods or services (on which EL was charged) from non-resident e-commerce operator will now have to evaluate the nature of income and its taxability under the provisions of the I-T Act as well as under the tax treaty on a case-to-case basis.” ” However, in certain cases, the non-resident vendor may not be willing to provide such details and may require the Indian customers to bear the taxes in India.”
For example, a foreign entity selling music or a book to a customer online will now not have to pay this tax.However, this now casts a compliance burden on the Indian customer.
Mitesh Jain, partner, Economic Laws Practice, said, “The Indian customer purchasing goods or services (on which EL was charged) from non-resident e-commerce operator will now have to evaluate the nature of income and its taxability under the provisions of the I-T Act as well as under the tax treaty on a case-to-case basis.” ” However, in certain cases, the non-resident vendor may not be willing to provide such details and may require the Indian customers to bear the taxes in India.”
