Finance Bill amendments widens tax base
The revenue-hungry Centre has moved quickly and quietly to bring non-resident e-commerce operators into the ‘equalisation levy’ net from April 1.
The ‘equalisation levy’ was introduced in 2016 on payments made by residents to a non-resident for online advertisements. The Centre has now widened the net to cover non-resident e-commerce operators.It may be noted that for this purpose, e-commerce operator has been defined as a person who owns, operates or manages a digital or electronic platform for online sale of goods or services or both.
What is commendable about this unilateral move is that it came even as the OECD countries under the Base Erosion and Profit Shifting (BEPS) Action Plan I are still striving to get a consensus on the taxation of digital economy.
You might also be interested to read: Coronavirus Crisis May Fast-forward IT’s Work-from-home Adoption
Sore point
However, a sore point for industry is that the move came surreptitiously through amendments —which got passed in Parliament without discussion — to the Finance Bill 2020 on Monday. There are some tax experts who point out that Indian revenue biting the digital economy bullet was always on the cards, given that a government appointed panel, which went into the matter had few years ago, listed out the areas that need to be brought under equalisation levy in due course of time.
Source: The Hindu BusinessLine
