Google tax: I-T Dept notifies annual statement, appeal forms for e-comm firms

Our Bureau New Delhi | Updated on October 29, 2020

Equalisation levy to be paid in 4 instalments, by July 7, October 7, January 7 and March 31

The Income-Tax Department has notified the annual statement and appeal forms for e-commerce operators required to pay equalisation levy — popularly known as ‘Google tax’ — with effect from April 1, 2020.

Also read: Guidelines for TDS by e-commerce, TCS on sale of goods amounting to ₹50 lakh or more

The department had amended the Equalisation Levy Rules, 2016 to align the annual statement and forms with new provisions. E-commerce companies need to pay the levy in four instalments, by the due dates of July 7, October 7, January 7 and March 31.

Sandeep Jhunjhunwala, Partner at Nangia Andersen, said the challans for this were notified in July 2020 and required furnishing of PAN and Indian bank account for remittance of levy. The annual statement and appeal documents also mandate quoting the PAN/Aadhaar number of non-residents, thereby corroborating the view that non-resident e-commerce entities may need to obtain PAN in India.

Also read: Netting taxes in the age of digital economy

Verification code

A new electronic verification code for the person verifying the annual statement has also been introduced. At this juncture, it is not clear if this code is an alternative to the PAN of that person. “The notified appeal forms, both for appeals before the Commissioner (Appeals) and the Tribunal, provide for a mention of the amount of equalisation levy in dispute,” Jhunjhunwala said.

Also read: FinMin rules out clarification, FAQ on ‘Google Tax’

Earlier provisions

The ‘Google tax’ initially was applicable to payments for digital advertisement services received by non-resident companies without a permanent establishment (PE) here, if these exceeded ₹1 lakh a year. The rate of tax was 6 per cent. The companies using these services were required to withhold the tax amount.

In the 2020-21 Budget, the government widened the ambit of the levy by including e-commerce companies. The applicable tax rate is 2 per cent (plus a surcharge) on amount of consideration received/receivable by an e-commerce operator. This has come into effect from April 1.

The rules apply to e-commerce operators who are non-residents, and who own, operate or manage digital or electronic facilities or platforms for online sale of goods or online provision of services or both. The law says this levy will not be applicable to any e-commerce operator making/providing/facilitating e-commerce supply or services, who has a PE in India. Also, an operator with annual turnover up to ₹2 crore is exempted from the levy.

Published on October 29, 2020

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