IT Dept Makes Changes To Challan For Non-Resident E-Commerce Companies

The income tax department has made last-minute changes to the challan for paying the 'equalisation levy' by expanding its scope to include non-resident e-commerce players supplying goods or services online. The first installment is due on 7 July.

Over two dozen non-resident tech companies would come under the purview of the equalisation levy which was introduced in Budget 2020-21 and has come into effect from 1 April 2020. A 2 percent tax would be levied on consideration received by such companies from e-commerce supply or services.

The income tax department has modified challan ITNS 285 (relating to the payment of equalisation levy) to enable payment of the first installment by non-resident e-commerce operators.

The amended challan now adds "e-commerce operator for e-commerce supply or services" under 'Type of Deductor'. The challan also seeks mandatory PAN of the deductor. Further, it provides for 'Outside India' option while seeking address details.

The expansion of India's digital economy tax comes at a time even after little consensus on the issue among Organisation for Economic Co-operation and Development (OECD) nations, including the US-India Business Council which represents technology giants.

"This has rather imposed a burdensome and challenging task for non-resident e-commerce players to apply for and obtain Permanent Account Number within one business day in the midst of curbs, lockdown and pandemic affected business life and also organize the mode of payment through an Indian bank account or debit card issued by an Indian bank," said Nangia Andersen LLP Partner Sandeep Jhunjhunwala to PTI.