New Delhi: Google<\/a> has paid the 2% additional equalisation levy<\/a> on digital transactions after holding it back initially. Netflix<\/a> and Adobe<\/a> have also paid up, said people aware of the development. This is expected to put pressure on the others such as Facebook<\/a>, LinkedIn, Ebay and Uber that haven’t paid the levy, citing lack of clarity.
“We have complied with the additional tax levy,” a Google India spokesperson told ET, but didn’t say how much it had paid. Netflix and Adobe did not respond to queries.
Penalty to impact decision
<\/strong>
The government had imposed a 2% tax in the budget for FY21 on the sale of goods or delivery of services through a non-resident ecommerce operator and the first instalment of the levy became due on July 7 for the April-June quarter. The government is learnt to have received over ₹400 crore from the equalisation levy for FY21 so far. The deadline for paying the second instalment was October 7.
New Delhi: Google<\/a> has paid the 2% additional equalisation levy<\/a> on digital transactions after holding it back initially. Netflix<\/a> and Adobe<\/a> have also paid up, said people aware of the development. This is expected to put pressure on the others such as Facebook<\/a>, LinkedIn, Ebay and Uber that haven’t paid the levy, citing lack of clarity.
“We have complied with the additional tax levy,” a Google India spokesperson told ET, but didn’t say how much it had paid. Netflix and Adobe did not respond to queries.
Penalty to impact decision
<\/strong>
The government had imposed a 2% tax in the budget for FY21 on the sale of goods or delivery of services through a non-resident ecommerce operator and the first instalment of the levy became due on July 7 for the April-June quarter. The government is learnt to have received over ₹400 crore from the equalisation levy for FY21 so far. The deadline for paying the second instalment was October 7.
Nasscom<\/a>’s head of public policy Ashish Agarwal said that companies have little choice but to calculate payments according to their interpretation of the rule.
Finance secretary Ajay Bhushan Pandey said on July 23 that the government would not issue clarifications or frequently asked questions (FAQs) on the applicability of the 2% tax on ecommerce transactions, as the law was very clear.
“Superimposing FAQs on law approved by parliament is not a good practice… It is almost like giving an advance ruling, which is not the job of the revenue department,” he said. “The entire digital tax law is not very lengthy, it’s not very complicated. They (companies) have their own tax advisers, they can make their own interpretations, and then they can act on this.”
However, companies could still contest the levy, experts said.
“If companies do not pay, they will invite penal provisions from the government. But it will be wrong to see from the point of view that just because companies have paid, there is no issue with it,” Agarwal said. “Companies do not want noncompliance, they do not want penalties imposed and so they have no choice.”
Experts said companies are still seeking clarity from the government on implementation, applicability and computation of the levy.
“Many foreign assessees deferred the payment of the first instalment (due July 7) on grounds of the pandemic and or the need to set up internal systems to collect or pay the tax. Some were expecting an extension,” said a senior lawyer representing one of the companies.
(With inputs from Surabhi Agarwal)<\/em>
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