Finance Act fails to address industry concerns over equalisation levy

Experts say levy will cause compliance problems for taxpayers, having come so late. Companies will have to do a lot of adjustments in their own systems while trying to comply with this newly clarified

The government offered some relief on its contentious proposals on equalisation levy, through an amendment in the finance Bill, 2021. However, this did not satisfy industry. 

While the levy applied only to digital advertising services till March 2020 at the rate of six per cent, the government widened the scope to impose two per cent tax on non-resident e-commerce players with a turnover of Rs two crore from April 1, 2020.

In fact, the Finance Bill, 2021 sought to further expanded the scope of the two per cent equalisation levy by way of clarifications to e-commerce supplies or services when