No Equalisation Levy On Foreign Companies Paying Income Tax In India, Clarifies FM Nirmala Sitharaman

In a major announcement, Finance Minister Nirmala Sitharaman on Tuesday clarified that platforms similar to Alibaba, Amazon, and Netflix will not be accountable for the equalisation levy as long as the goods and providers listed are owned or provided by an Indian permanent institution of abroad entity, reports Economic Times.

The Lok Sabha on Tuesday passed the Finance Bill, 2021, with Sitharaman introducing fresh amendments. She stated that the equalisation levy will not be applicable on foreign companies who pay income tax in India.

She said that equalisation levy has been imposed to provide a level playing field between Indian businesses who pay tax in India and foreign e-commerce companies who do business in India but do not pay any income tax here.

"We are only trying, through the equalisation levy, to treat everybody who is operating in India equally. If the foreign e-commerce companies pay income tax here, then the equalisation levy is not applicable to them. Hence there is no extra burden on any company," she added.

“I intend to make clear that this equalisation levy will not be relevant on consideration for items, that are owned by Indian residents. Thus the priority raised concerning further burden wouldn’t be there in any respect,” Sitharaman stated.

Sitharaman said that she intended to clarify through the amendment that equalisation levy would not be applicable on consideration for goods that are owned by Indian residents.

With IANS Inputs