2020-07-07 19:41:00

US-India Strategic Partnership Forum (USISPF), an industry body representing some of the big companies in both the countries, has sought relief from the finance ministry on the tax that India introduced from April on e-commerce activities.

The group said in an appeal to the ministry addressed to finance secretary Ajay Bhushan Pandey that provisions dealing with the 2% digital economy tax called the ‘equalisation levy’ needed more clarity and that more time was needed for payment.

“…we would like to request the ministry of finance to consider deferring the date of the implementation of the levy. Alternatively, postpone the first due date for payment or at least grant relief from interest for delayed payment of first instalment,” USISPF said in a 6 June communication. Mint has seen a copy of the letter.

The due date for paying the first instalment is Tuesday. The Income Tax Department last week notified the tax form and rules for making the payment, indicating the government’s intent to go ahead with the levy in spite of calls from lobby groups seeking more time, Mint reported on Saturday.

The Finance Bill 2020 expanded the ‘equalisation levy’ introduced in June 2016 on payments made to non-resident service providers for hosting online advertisements to include other supply of services including online sale of goods by e-commerce operators.

“As the law reads today, it covers all business to business and business to consumer transactions, third-party and related party transactions, across digital and non-digital businesses, where goods and services are sold online,” said USISPF. E-commerce operators have been grappling with the scope of the expanded levy, it said.

The move comes at a time there is little consensus on the issue among OECD nations and there is a raging dispute between the US and some of the European nations on taxing digital economy, targeting major US tech companies.

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