CBDT defines Assessing Officer’s jurisdictional authority for equalization levy on e-commerce cos

The Finance Ministry now does not appear to be in mood of deferring Equalization Levy on e-commerce companies, as the Central Board of Direct Taxes (CBDT) has defined Assessing Officer (AO) jurisdiction for this levy purpose.

Introduced in 2016, Equalization Levy is also known as ‘Google Tax’ as initially it was applicable to payments for digital advertisement services received by non-resident companies without a permanent establishment (PE) here, if these exceeded ₹1 lakh a year. The rate of tax for this purpose is 6 per cent. The companies using these services are required to withhold the tax amount. Later, in the 2020-21 Budget, the Government widened the ambit of the levy by including e-commerce companies. The applicable tax rate is two per cent (plus a surcharge) on amount of consideration received/receivable by an e-commerce operator. This has come into effect from April 1.