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.