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India equalises levy on e-commerce supply or services

Effective April 1 2020. a 2% levy will be chargeable on consideration received or receivable by an e-commerce operator from e-commerce supply or services made, provided, or facilitated by it to:

  • An Indian resident;
  • A nonresident in “specified circumstances,” namely:o Sale of advertising that targets Indian customers (defined as persons who reside in India, or access the advertisement though an IP address located in India); ando Sale of data collected from Indian customers; or
  • A person who buys such goods, services, or both via an IP address located in India.

An e-commerce operator is a nonresident who owns, operates, or manages a digital or electronic facility or platform for online sales of goods, online provision of services, or both.

E-commerce supply or services means online:

  • Sales of goods owned by the e-commerce operator;
  • Provision of services by the e-commerce operator;
  • Sales of goods, provision of services, or both, facilitated by the e-commerce operator; or
  • Any combination of the above.

The equalization levy is essentially expanded from online advertising to nearly all e-commerce done in India by companies that do not have taxable presence in India.