E-commerce companies disturbed by duty, equalization levy and confusions on custom duty

Many foreign e-commerce companies in India have been hit hard. It is not understood whether these companies pay equalization fees first or custom duty. Custom duty is levied on anything purchased from foreign e-commerce companies in India. After this, in April this year, the government has started levying a two per cent equalization levy on them.

Now the question is whether equalization levy will be levied on the price of goods being sourced from foreign companies or whether it will be levied on the final fixed price after custom duty is imposed on it. There is no explanation from the government about this. Foreign e-commerce companies are confused about this. There are mostly foreign e-commerce companies in India, which are facing tax.

What is it Equalization levyThe

In fact, the government had imposed a two per cent tax on services delivered by non-resident commerce operators in the budget of 2020-21. This is called equalization levy. The department has notified the challan of the e-commerce equalization levy. For depositing levy, PAN and bank account number of e-commerce operator in Indian Bank will be required.

Recently, the government had said that PAN will be necessary for foreign companies operating e-commerce platforms in India so that they can levy equalization levy. According to the CBDT, it has amended the Equalization Levy Rules 2016. Foreign e-commerce companies have also been brought under this ambit, who have to pay this levy.

PAN is now mandatory for foreign companies operating e-commerce platforms in India

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