Finance & Economy | News & Insights

2% equalisation levy on non resident e commerce companies

Published: July 18, 2020
Author: munimji

India has levied 2% equalization on the non-resident E-Commerce company stating that it is a non-discriminatory measure and is aiming at taxing the businesses that have a close interconnection with the country’s market through their digital operations.

“It does not discriminate against companies based in the United States as it applies equally to all non-resident e-commerce operators not having a permanent establishment in India, irrespective of the origin of such companies,” India has said.

The US had last month decided to start an investigation under Section 301 of the Trade Act, 1974, into the digital services taxes that have been adopted or are being considered by a number of countries, including India, to “unfairly” targeting American tech companies. It had then invited public comments on the said investigation.

The equalization levy is seen as an additional safeguard against BEPS (Base Erosion and Profit Shifting) and loss of revenue in India due to activities of the e-commerce operators operating in the country.

“This has necessitated the introduction of 2 percent Equalisation Levy on e-commerce supply or services. This levy is non-discriminatory as it has uniform applicability,” India has said.

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