E-commerce firms seek clarity on equalisation levy

New Delhi: E-commerce firms based overseas have asked the government to impose equalisation levy of 2% only on the facilitation fee they get for transactions they carry out in India instead of on the full transaction and said this should be treated as their turnover.

They also suggested that the levy should not be imposed on services or goods that are executed online but delivered offline – for instance, online hotel bookings, air ticketing and even heavily regulated financial services – besides seeking a clear definition of what comprises online sale of goods, services and the digital or electronic platform.

“The 2% levy should be only on the amount of facilitation fees belonging to the e-commerce operator, in case of mere facilitation,” the companies proposed in a representation being sent to the Central Board of Direct Taxes, adding that for taxation purposes, sales, turnover or gross receipts should mean only the facilitation fees they earned. The tax authorities should consider only e-commerce supplies or sales made after April 1, 2020, it said.