India has been one of the fore-runners in adopting many BEPS action plans and the digital taxation was no exception. In year 2016, India introduced 6% equalisation levy ( let us consider this as version 1.0) on digital specified services received by a non-resident not having a Permanent Establishment (PE) in India.
In year 2020, India has introduced a version 2.0 of the equalisation levy, which extends the scope of such levy to non-resident e-commerce operators providing an e-commerce supply or a service [companies that are not covered by the Equalisation levy 1.0 and whose turnover is more than INR 20 million (USD 260,000)].
Further, amendment was brought in the year 2021 with Union Budget 2021 (with retrospective effect) where the applicability of levy and the definition of e-commerce supply have been further clarified/ expanded, giving it an avatar of Equalisation levy 2.1.
We at TransPrice help non-residents doing business with Indian business houses or customers in analyzing & testing their business models for applicability of Equalisation Levy (Digital Tax) and if applicable, post application quarterly and annual compliances and if not applicable, documenting the same.
TransPrice specializes in assisting non-residents engaged in business activities with Indian entities or customers in navigating the complexities of the Equalisation Levy (Digital Tax). Our experts thoroughly analyze and evaluate their business models to determine the applicability of this tax. For those businesses that fall within the purview of the levy, we provide comprehensive support for quarterly and annual compliance. Alternatively, if the Equalisation Levy is not applicable, we ensure proper documentation to substantiate the exemption. Our services encompass tax dispute resolution in India, addressing income tax disputes, and strategic domestic tax planning to optimize your tax position.