On 27 March 2020, the Central Board of Direct Taxes (CBDT) published the Finance Act 2020 which received the assent of the President on the same date that includes a new equalisation levy with effect from 1 April 2020. The levy will be charged at a rate of 2% on the amount of consideration received or receivable by a non-resident “e-commerce operator” for “e-commerce supply or services” made or provided or facilitated by it.
An existing 6% levy has been in force in India since 2016, but is levied on the purchase of advertising services by Indian companies from non-residents. The new equalisation levy includes the sale of Indian advertising services and the sale of Indian data between non-residents businesses. This can be determined either by advertising a customer resident in India or by collecting data about a customer resident in India for use between non-resident businesses. The location of the resident in India can be determined and confirmed using the IP address used by the customer, among other identifying pieces of evidence.
The equalisation levy is required to be paid on a quarterly basis with deadlines for 7 July, 7 October, 7 January, and 31 March.
