THE Finance Minister today proposed to impose Equalisation Levy @ 2%, of the amount of consideration received or receivable by an e-commerce operator from e-commerce supply or services made or provided or facilitated, by it. Such levy is proposed to be imposed on supplies made or services rendered to -

(i) a person resident in India;

(ii) a non-resident in the specified circumstances notified in Section 165A(3); or

(iii) to a person who buys such goods or services or both, using internet protocol address located in India.

For this purpose, E-commerce supply or service is defined as to mean -

(i) online sale of goods owned by the e-commerce operator;

(ii) online provision of services provided by the e-commerce operator;

(iii) online sale of goods or provision of services or both, facilitated by the
e-commerce operator; or

(iv) any combination of activities listed in clause (i), (ii) or clause (iii);

Clause (50) of section 10 of the Act provides for the exemption for the income arising from any specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 comes into force or arising from any e-commerce supply or services made or provided or facilitated on or after the 1st day of April, 2021 and chargeable to equalisation levy under that Chapter.

The Finance Bill has proposed to insert an Explanation to section 163 of the Finance Act, 2016, clarifying that consideration received or receivable for specified services and consideration received or receivable for e-commerce supply or services shall not include consideration which are taxable as royalty or fees for technical services in India under the Income-tax Act read with the agreement notified by the Central Government under section 90 or section 90A of the I-T Act.

Under section 165A of Finance Act, 2016, as inserted by section 153 of the Finance Act, 2020, Equalisation Levy is to be levied at the rate of two per cent of the amount of consideration received or receivable by an e-commerce operator from ecommerce supply or services made or provided or facilitated, by it-

(i) to a person resident in India; or

(ii) to a non-resident in the specified circumstances as referred to in sub-section (3); or

(iii) to a person who buys such goods or services or both, using internet protocol address located in India.