No digital tax if goods, services sold via Indian arm of foreign e-commerce players

In a bid to provide a level-playing field, the government has decided not to levy 2 per cent digital service tax if goods and services are sold through Indian arm of foreign e-commerce players.

The amendment to Finance Bill 2021 clarifies that offshore e-commerce platforms don’t have to pay 2 per cent equalisation levy if they have permanent establishment or they pay any income tax here. However, foreign companies who are not paying any tax will have to pay.