[Jan] Equalization levy (Digital services tax) AKA google tax Flashcards

1
Q

What is it? How is it different from Income tax act,1961?

A
  • Company ‘A’ -> registered in US ->it’s subsidiary B registered in India -> providing digital services (Advrtisements/e-commerce platforms)Equalization levy not applicable on B -> Pay normal income tax under IT act 1961
  • If B is not registered in India,has no physical presence -> still selling digital services in India -> equalization levy will be applicable on B but no Income tax
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2
Q

Law support?

A

Under Finance Act 2016

From 1st april 2020-> equalization levy of 2% is applicable on e-commerce firms i.e. amazon also

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3
Q

On what values is it levied?

A

It’s a direct tax & is levied on ‘Revenue’ & not ‘profit’

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4
Q

on which services is the tax imposed?

A

digital platform services, digital content sales, digital sales of a company’s own goods, data-related services, software-as-a-service etc.

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5
Q

Update (12 feb)

A

The United States Trade Representative (USTR’s) Section 301 has called out India’s digital taxation regime, claiming it is not in sync with international tax principles.

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