Charge of Equalisation levy on E-commerce supply or services - Section 165A of the Finance Act, 2016 - International Taxation - Income Tax

Charge of Equalisation levy on E-commerce supply or services - Section 165A of the Finance Act, 2016 (1) Chargeability of Equalisation levy on E-commerce supply or services: Equalisation would be chargeable @2 % on the amount of consideration received or receivable by an e-commerce operator from e-commerce supply or services made or provided or facilitated by it- to a person resident in India; or to a non-resident in the specified circumstances as referred to in section 165A(3); or to a person who buys such goods or services or both using internet protocol address located in India. (2) Non-Chargeability of equalisation levy - where the e-commerce operator making or providing or facilitating e-commerce supply or services has a permanent establishment in India and such e-commerce supply or services is effectively connected with such permanent establishment; where the equalisation levy is leviable under section 165 ; or sales, turnover or gross receipts , as the case may be, of the e-commerce operator from the e-commerce supply or services made or provided or facilitated is less than ₹2 crore rupees during the previous year. [ Section 165A(2) ] (3) For the purposes of this section 165A, specified circumstances mean sale of advertisement, which targets a customer, who is resident in India or a customer who accesses the advertisement though internet protocol address located in India; and sale of data, collected from a person who is resident in India or from a person who uses internet protocol address located in India. Consideration received or receivable from e-commerce supply or services shall include consideration for sale of goods irrespective of whether the e-commerce operator owns the goods, so, however, that it shall not include consideration for sale of such goods which are owned by a person resident in India or by a permanent establishment in India of a person non-resident in India if sale of such goods is effectively connected with such permanent establishment. consideration for provision of services irrespective of whether service is provided or facilitated by the e-commerce operator, so, however, that it shall not include consideration for provision of services which are provided by a person resident in India or by permanent establishment in India of a person non-resident in India if provision of such services is effectively connected with such permanent establishment. [ Section 165A(3), inserted vide Finance Act, 2021 w.e.f. 01.4.2021 ] (4) Income - Tax Exemption [ w.e.f. 1st Jun 2016 Section 10(50) ] From 01.09.2024 any income arising from any (i) specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 comes into force; or (ii) e-commerce supply or services made or provided or facilitated on or after the 1st day of April, 2020 but before the 1 st day of August, 2024, and chargeable to equalisation levy under that Chapter. [ Substituted Finance (No. 2) Act, 2024 ] Upto 31.07.2024 - any income arising from any specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 comes into force or arising from any e-commerce supply or services made or provided or facilitated on or after the 1st day of April, 2020 and chargeable to equalisation levy under that Chapter. However, the exemption will not apply for royalty/fees for technical services which is taxable under the income-tax read with DTAA. (5) Sunset of the provision of Section 165A [ Section 165A(4), Inserted vide Finance (No. 2) Act, 2024 w.e.f. 01.08.2024 ] The provisions of this section shall not apply to any consideration received or receivable by an e-commerce operator from e-commerce supply or services made or provided or facilitated by it on or after the 1st day of August, 2024.