News

Foreign e-commerce firms’ hopes for relief dashed

2/24/2021

The government has clarified that it will implement the equalization levy on ‘consideration for the sale of goods for foreign e-commerce operators. This means the 2% levy would be applicable on the whole transaction when Indians transact with overseas portals of Amazon or Netflix. Global internet firms were hoping they would be allowed to pay the levy on their net revenue and not on the gross bill. E-commerce transactions through India-based entities of Amazon won’t be impacted as they pay local taxes, industry executives and tax experts said.
This would be implemented irrespective of whether the product or service being offered is owned by the e-commerce operator. The clarification has also expanded the definition of ‘online supply of goods’ and ‘online supply of services’. The wider definition now includes acceptance of offer for sale, placing the purchase order; acceptance of the purchase order, and payment of consideration.

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