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<ul><li><keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword> has agreed to back out of the 2% <keyword id="3267303" type="General" weightage="20" keywordseo="equalisation-levy" source="Orion">Equalisation Levy</keyword> it imposed on foreign companies providing digital services.</li><li>The US has also agreed to do away with the sanctions it imposed on India to challenge the tax levy.</li><li>A new global tax agreement has been made that will ensure that multinational companies pay at least 15% tax in the country they are operating in.</li></ul>While India has <a href="https://www.theregister.com/2021/11/26/india_equalisation_levy_windback/">agreed to back out</a> of 2% <keyword id="6998372" type="General" weightage="20" keywordseo="digital-service-tax" source="Orion">digital service tax</keyword>, which was levied on foreign companies for all the revenues generated from digital services offered in India, the US has also decided to do away with the sanctions it has imposed on India to challenge the tax levy. <cmsannotation type="cmsannotation" annotationid="What is the digital tax scheme?" comment="subhead" text="What is the digital tax scheme?">What is the digital tax scheme?</cmsannotation> The central government in its Finance Bill of 2020-21, imposed 2% digital service tax on trade and services of foreign e-commerce companies such as <keyword id="18635" type="General" weightage="20" keywordseo="amazon" source="Orion">Amazon</keyword> and Walmart-owned <keyword id="6354742" type="General" weightage="20" keywordseo="flipkart" source="Orion">Flipkart</keyword> and others having an annual turnover of ₹2 crore or more. The expanded equalisation levy became applicable from April last year to a range of digital services, including non-resident e-commerce operators who are involved in online sale of goods and provision of services. As most of these foreign companies are American, <keyword id="339316" type="General" weightage="20" keywordseo="us-trade" source="Orion">US Trade</keyword> Representative felt that this was a discrimination against American firms and violated the principles of international tax law. The US government imposed a tariff of 25% on goods imported from India in July this year, but it was rolled back soon after. India first imposed a 6% equalisation levy in 2016, but this was restricted to online advertisement services by foreign companies. <cmsannotation type="cmsannotation" annotationid="How will it benefit India?" comment="subhead" text="How will it benefit India?">How will it benefit India?</cmsannotation> In October, the G20 summit and the Organisation for Economic Co-operation and Development meeting saw an international agreement on new global taxation rules. This includes that multinational firms have to pay at least 15% of their total revenue in each country they are operating in. This would mean that companies like Microsoft, <keyword id="6355629" type="General" weightage="20" keywordseo="google" source="Orion">Google</keyword>, Amazon, etc, must pay taxes for its operation in India. <cmsannotation type="cmsannotation" annotationid="What does it mean to India?" comment="subhead" text="What does it mean to India?">What does it mean to India?</cmsannotation> While the US backed out of the tariff, India is yet to stop the levy as the global tax rules are yet to be implemented. However, India and the US have reached an agreement that will count the Equalisation Levy as a credit against future taxes. Those credits will be accounted for from April 1, 2022, until either March 31, 2024, or whenever the global taxes are sorted. Although the US Department of Treasury has hailed the deal with India, the Indian government has not expressed any opinions on the same. Even the tech-giants like Amazon, Google and others are mum on the latest tax rules that will impact them. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/poco-x4-pro-poco-x4-poco-x4-gt-launch-timeline-revealed/articleshow/87923367.cms">Poco X4 series to feature four smartphones, launch planned from Q1 2022 onwards</a> <a href="https://www.businessinsider.in/tech/news/the-best-malware-removal-softwares-to-protect-your-computer/slidelist/87923931.cms">The best malware removal softwares to protect your computer</a>

Digital service tax explained: India backs out of equalisation levy after global tax agreement kicks in

<ul><li><keyword id="3658" type="COUNTRY" weightage="20" keywordseo="India">India</keyword>’s finance minister told Parliament that the tax called ‘equalization levy’ applies to e-commerce firms, not investors.</li><li><keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> also disclosed that the government has no data on how many <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> exchanges are currently operational in the country or how many Indian investors are on the platforms.</li><li>According to her, the Modi administration has no conclusive information on whether or not these exchanges are involved in any illicit activities.</li></ul>India may not be looking to impose its equalisation levy, often called the ‘Google Tax’, on investors putting money into <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">cryptocurrencies</a>. <div type="ExtQuote" text="Equalisation levy is imposed on e-commerce operators, not on the investor." auname="India’s Finance Minister, Nirmala Sitharaman said on July 27, during the Monsoon session of Parliament"></div> The controversial Google Tax, which has historically been imposed on foreign companies — like Amazon, Facebook and others — earning revenues from India for advertising online. Earlier <a href="https://www.businessinsider.in/cryptocurrency/news/trading-on-crypto-exchanges-based-outside-of-india-may-get-more-expensive/articleshow/83747213.cms">reports</a> had indicated that trading cryptocurrencies on foreign exchanges may attract a 2% equalisation levy, but they did not relieve how the tax would be imposed. Sitharaman’s comments, in response to a query from Sushil Kumar Modi — the deputy chief minister of the eastern state of Bihar — shed some clarity. <cmsannotation type="cmsannotation" annotationid="The Indian government data has no data on crypto exchanges or investors" comment="subhead" text="The Indian government data has no data on crypto exchanges or investors">The Indian government data has no data on crypto exchanges or investors</cmsannotation> Modi’s original question to Sitharaman was whether or not the government collects information about <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite&amp;is_retargeting=false&amp;shortlink=BI&amp;c=site&amp;pid=Business%20Insider&amp;af_click_lookback=7d&amp;af_channel=Business%20Insider&amp;af_adset=article&amp;af_force_deeplink=true">crypto exchanges</a> and their investors in India. According to the Finance Minister, the Modi administration does not collect any such information. As per data shared by WazirX CEO, <a href="https://twitter.com/nischalshetty/status/1389437595327733764?lang=en">Nischal Shetty</a>, the country has over 15 million investors trading in crypto and the monetary value of that trade comes up to around ₹15,000 crore. In addition to exchanges, India is home to over 350 blockchain and crypto startups — many of which have raised money from bigger global exchanges. WazirX — the largest crypto exchange in the country — for instance, is owned by crypto giant Binance. <cmsannotation type="cmsannotation" annotationid="Finance Ministry has no insight into the how cryptocurrencies are being used" comment="subhead" text="Finance Ministry has no insight into the how cryptocurrencies are being used">Finance Ministry has no insight into the how cryptocurrencies are being used</cmsannotation> In addition to highlighting the lack of data on how many companies are operating within the crypto space, Sitharam also disclosed that her department has not received information on whether any of these exchanges are involved in drug trafficking or other forms of money laundering in the country. However, the authorities have been digging in. Earlier this month, the Enforcement Directorate (ED) <a href="https://www.businessinsider.in/cryptocurrency/news/cryptocurrency-wazirxs-founder-nischal-shetty-gets-notice-from-ed-for-2971-crore-transactions/articleshow/83427891.cms">accused</a> WazirX of allegedly violating provisions of the Foreign Exchange Management Act (FEMO) for <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> deals worth ₹2,790.74 crore. More recently, an individual got arrested by the Hyderabad police for running a cryptocurrency scam to the tune of ₹3,145 crore. According to the cops, the person allegedly used WazirX to befriend the victims. Meanwhile, the crypto exchange told <a href="https://www.medianama.com/2021/07/223-cryptocurrency-scam-wazirx-binance/">Medianama</a> that it is not involved in any way. <cmsannotation type="cmsannotation" annotationid="Crypto regulation in India still hangs in the balance" comment="subhead" text="Crypto regulation in India still hangs in the balance">Crypto regulation in India still hangs in the balance</cmsannotation> India has been on the verge of formulating a bill to regulate cryptocurrencies in the country. It was expected to be tabled during the ongoing Monsoon Session of the Parliament, but <a href="https://www.businessinsider.in/cryptocurrency/news/indias-crypto-bill-is-unlikely-to-be-up-for-discussion-this-month-and-it-may-be-a-while-before-we-see-it-in-parliament/articleshow/84401863.cms">stakeholders</a> now believe that is unlikely. The crypto industry in India has been in a flux of sorts, following clashes with the country’s central bank, the Reserve Bank of India (RBI). The bank had issued an informal note to lenders in May, which led them to withdraw services from many crypto exchanges in the country. Exchanges in turn had to stop taking rupee deposits from investors, and though the situation has improved since, some have still limited the services they can provide. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/cryptocurrency/news/imf-remains-wary-of-cryptocurrencies-calls-legalisation-an-inadvisable-shortcut/articleshow/84790881.cms">Inadvisable shortcut, a step too far, and dire consequences — the IMF warns countries against using Bitcoin as a national currency</a> <a href="https://www.businessinsider.in/cryptocurrency/news/elon-musk-and-michael-saylor-had-the-most-influence-on-crypto-markets-over-the-last-three-months/articleshow/84789343.cms">Elon Musk and Michael Saylor’s influence on crypto markets have made it as volatile as the ‘crypto winter’ of 2017</a>

Equalisation levy on crypto exchanges in India will not apply to investors, according to the Finance Minister

New Delhi, Mar 31 () The "sudden" imposition of equalisation levy on e-commerce companies without permanent establishment in India is shocking, especially in the current challenging times, and a wider stakeholder consultation is needed, the Internet and Mobile Association of India (IAMAI) said on Tuesday. The industry body, which represents the digital services sector in India, said it has reached out to the government on this matter on behalf of the sector at large. IAMAI pointed out that the Budget Speech of Finance Minister Nirmala Sitharaman did not have any such suggestions. "Since mid of March, the entire sector was caught up in the impending challenge of COVID-19 and the restrictive counter-measures much like the rest of the economy. "The Finance Bill which was finally adopted by Parliament on March 23 amidst this chaos suddenly imposes this levy effective from April 1, 2020, thereby barely giving 7 days' notice to the sector for implementing this levy," it added. The levy, which is already paid by digital advertising companies like Google, would tax e-commerce companies without permanent establishment in India at 2 per cent. IAMAI said the imposition of the levy comes at a time when e-commerce services incidentally are expected to play a critical role in abating the COVID-19 crisis. "This sudden imposing of an additional levy at such times will only make matters worse, as it will require businesses to make complicated changes to their internal systems, accounting and billing mechanisms in such short notice, that too in such challenging times of lockdown and work from home, which makes it all the more arduous," IAMAI said. This will affect not only the operation of such services but also the well-being of the economy and society, at large presently banking on such services at times of dire essentials, it added. The association has appealed to the government to desist from imposing this levy at present and requested for wider stakeholder consultation on the matter. Equalisation levy (EL), which was first introduced in 2016 for digital advertisement platforms, was in the context of the ongoing BEPS negotiations under the OECD. The BEPS discussions have come a long way beyond that, and the discussion initiated by the CBDT on a new formula for denoting virtual Permanent Establishment (PE) and Profit Attribution are a logical extension of the global process, IAMAI said. "A sudden imposition of EL suggests reversing the process and this raises grave concerns amongst the digital industry about the future of taxation regimes in India for digital service providers," it added. E-commerce players like Amazon and Flipkart whose headquarters are not in India potentially have to pay the equalisation levy from the next financial year. SR HRS

Sudden imposition of equalisation levy on e-tailers in these challenging times is shocking: IAMAI

New Delhi, Jul 4 () The income tax department has brought in 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. 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 April 1, 2020. Its first instalment is due on July 7. The 2 per cent tax would be levied on consideration received by such companies from e-commerce supply or services. The income tax department has modifies challan ITNS 285 (relating to 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. Nangia Andersen LLP Partner Sandeep Jhunjhunwala said along with this modification in the payment challan, the Central Board of Direct Taxes (CBDT) has also cleared the clouds on requirement of PAN by making it a mandatory tab in the challan. "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," he said. Jhunjhunwala further said non-resident digital companies were waiting for a detailed FAQ to get clarity on abstruse issues surrounding the equalisation levy. "This rushed move could cause substantial challenges in discharging the nearing first payment liability of equalisation levy, in case interest and penalty for delayed payments are to be avoided," he added. Deloitte India Partner Rohinton Sidhwa said while there have been widespread demands for its deferral due to the pandemic, there are also several parts of the new provisions that require clarification. Under the new law, the first instalment is due on July 7 for the equalisation levy charged on supplies in the first quarter of the financial year ending June 30. "The modification of the challan is to facilitate this payment. Earlier this challan only allowed payment for the 6 per cent equalization levy applicable on advertising services that was imposed by Finance Act 2016. Detailed FAQ's and procedural rules are yet to be specified for the new levy," Sidhwa added. Shardul Amarchand Mangaldas &amp; Co Partner Amit Singhania said, "The changes in payment challan will now enable the payment of equalisation levy by foreign companies. However, the industry was expecting its deferral considering the lack of clarification on few issues." JD ABM ABM

I-T dept amends tax challan to include non-resident e-commerce suppliers for equalisation levy

You could soon be shelling out more money to buy paid mobile apps from <a href="http://www.businessinsider.in/Apples-keen-interest-is-evident-as-it-tells-iTunes-chief-to-focus-solely-on-India/articleshow/53111202.cms">Apple </a>and <a href="http://www.businessinsider.in/Google-Apps-upload-enables-multi-stop-route/articleshow/53047180.cms">Google</a>, thanks to additional taxes that the government is considering. 
 
If the apps are included under the umbrella of the <a href="http://www.businessinsider.in/India-is-preparing-to-bring-Google-Facebook-and-Twitter-under-an-equalisation-levy/articleshow/51508264.cms">equalisation levy</a> by the end of this year as er the government consideration, buying them would cost more from the next year onwards. The guidelines regarding the same would be issued by the end of this year. 
 As of now, the <keyword id="3267303" type="UNKNOWN" weightage="100" keywordseo="equalisation-levy">equalisation levy</keyword> of about 6% is applicable on online advertisements from multinationals that are registered outside India. If these apps come under its ambit, it could increase the app prices by as much as 7 to 8%. 
 However, <keyword id="121964" type="ORGANIZATION" weightage="100" keywordseo="Central-Board-of-Direct-Taxes">Central Board of Direct Taxes</keyword> (<a href="http://www.businessinsider.in/CBDT-eases-TDS-claims-rules/articleshow/52969993.cms">CBDT</a>) had already anticipated something like this in March this year, which is why the move would not be that surprising for the industry. 
 
Also read: <a href="http://www.businessinsider.in/Super-rich-tax-payers-to-declare-cost-price-of-expensive-assets/articleshow/52108375.cms">CBDT asks super-rich tax payers to declare cost price of expensive assets</a> 
 
As per industry experts, the government only needs to issue a circular which would cover apps in the first round of guidelines. "The government can always increase the scope of equalisation levy and bring more transactions under this," Ajay Rotti, partner at tax consultancy Dhruva Advisors, told <a href="http://economictimes.indiatimes.com/tech/software/equalisation-levy-to-make-apps-purchased-on-apple-google-platforms-dearer-by-8/articleshow/53144969.cms">ET</a>. 
 
"Given that the definition of 'online' includes services through any other form of digital network, there is a worry among the industry that even advertisements on TV - since most of it is on digital network - could attract the 6% levy," he added.

Paid apps from Google and Apple might cost you more from next year

<a href="http://www.businessinsider.in/searchresult.cms?query=linkedin&amp;sortorder=effectivedate">LinkedIn</a> will not pass on the <a href="http://www.businessinsider.in/searchresult.cms?query=equalisation+levy&amp;sortorder=effectivedate">equalisation levy</a> to Indian companies advertising on its platform, becoming the first and may be the only MNC to do it. 
 <keyword id="28120" type="CITY" weightage="20" keywordseo="Linkedin">LinkedIn</keyword> plans to absorb the 6 per cent <keyword id="3267303" type="UNKNOWN" weightage="20" keywordseo="equalisation-levy">equalisation levy</keyword>, which was introduced by India on Business-to-Business (B2B) cross-border digital transactions with multinationals without permanent establishment in the country. 
 
However, <a href="http://www.businessinsider.in/searchresult.cms?query=google&amp;sortorder=effectivedate">Google</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=facebook&amp;sortorder=effectivedate">Facebook</a> plan to pass on the levy to their customers. 
 
Since, the Indian government cannot tax these multinationals directly having no establishment in the country, the burden will mostly fall on small firms and startups that rely on comparatively less expensive digital advertising. 
 
"LinkedIn would deduct the tax from its own share of the pie, and not pass it to company that is paying for the advertisement," a person with direct knowledge of the matter told ET. 
 
ET quoted another person saying LinkedIn is exploring ways in which a tax structure could be put in place around equalisation levy. 
 
"The issue currently is how LinkedIn can take credit of this (equalisation levy) in the US. As it stands today , this looks to ugh as there is no clarity as to whether the levy is a direct tax or an indirect, and whether it is cove red under bilateral trea ties," the person told ET. 
 It is also likely that with LinkedIn’s move, <keyword id="6355629" type="CITY" weightage="20" keywordseo="Google">Google</keyword> and <keyword id="6354576" type="CITY" weightage="20" keywordseo="Facebook">Facebook</keyword> may also face the pressure to absorb the equalisation levy, which is applicable June 1.

LinkedIn won't pass on equalisation levy to companies. Google, Facebook are you listening?

The <keyword id="498528" type="UNKNOWN" weightage="20" keywordseo="Google-tax">Google Tax</keyword>, or <keyword id="3267303" type="UNKNOWN" weightage="20" keywordseo="equalisation-levy">equalisation levy</keyword>, has been implemented from June 1, irrespective of resistance from startups and various associations. 
 
The equalisation levy aims at bringing internet giants such as Google and Facebook under the tax net for the money they make from Indian advertisers. 
 
Startups that are already facing cash crunch say this will further dent their coffers as Google and Facebook will then charge extra from them. 
 
Nitin Gupta, CEO at PayU Money, told ET the levy has come as a burden for small companies. 
 
“The big internet platforms will definitely pass on the additional cost to companies - making it more expensive for Indian companies to advertise online - since there is not many alternatives available for the advertisers,” Gupta told ET. 
 
“It will be a situation of double jeopardy for Indian companies. They will not only have to pay an extra cost but also do more compliance," Subho Ray, president of Internet and Mobile Association of India (IAMAI), told ET. 
 During <keyword id="2783177" type="UNKNOWN" weightage="20" keywordseo="Budget-2016">Budget 2016</keyword>, Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> announced that any services including online advertising, provision for digital advertising space, etc will come under the equalisation levy. 
 
On the contrary, Upasana Taku, director of mobile wallet player Mobikwik, told ET the tax will bring in clarity regarding payments to international entities. 
 
"Wiring money to the international accounts of these firms requires a lot of paperwork and rises many questions by the auditors regarding tax compliance, etc.," she told ET, adding “the tax makes sense since India is the last big open market for these companies. These behemoths are making tonnes of money working in India, so ideally, they should contribute something by way of taxes to the country.”

Google Tax is applicable from today, whether startups like it or not

In a bid to bring global internet companies, which are believed to be avoiding taxes in India, under the ambit, Indian government is mulling to levy an ‘equalisation tax’ on them. 
 
India thinks that <a href="http://www.businessinsider.in/searchresult.cms?query=google">Google</a>, <a href="http://www.businessinsider.in/searchresult.cms?query=facebook">Facebook</a> and <a href="http://www.businessinsider.in/searchresult.cms?query=twitter">Twitter</a>, which do not have permanent establishments in the country, are making profits and they cannot also be double-taxed. 
 
In this regard, the Indian government has found a way of earning something from the profits that these platforms have been making. 
 The ‘<keyword id="3267303" type="UNKNOWN" weightage="20" keywordseo="equalisation-levy">equalisation levy</keyword>’ that was mentioned in the <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2016">Budget 2016</a> will increase the cost of an array of online services. 
 
A government-appointed panel recommended the expansion of the so-called <a href="http://www.businessinsider.in/searchresult.cms?query=google+tax">'Google tax'</a>. 
 In a report, the eight-member committee on taxation of ecommerce proposed that services ranging from online advertising and <keyword id="6373689" type="ORGANIZATION" weightage="20" keywordseo="Cloud-computing">cloud computing</keyword> to software downloads and web hosting are subjected to an 'equalisation levy' of 6-8% of gross payment if the provider of the service is a foreign entity without a 'permanent establishment' in India. 
 
"India is challenging them: If you think credit for this 6% is so important for you, and you are deriving income from India, why don't you set up a permanent establishment in India?" Amarjeet Singh, a partner at KPMG, told ET. 
 In the UK, '<keyword id="498528" type="UNKNOWN" weightage="20" keywordseo="Google-tax">Google Tax</keyword>' is a provision that prevents technology companies from shifting profits offshore to tax havens. 
 While <keyword id="6355629" type="CITY" weightage="20" keywordseo="Google">Google</keyword>'s revenue from India was Rs 4,108 crore in 2014-15, <keyword id="6354576" type="CITY" weightage="20" keywordseo="Facebook">Facebook</keyword>'s topline was Rs 123.5 crore in the same period. 
 
Singh of KPMG said that the levy could be open to legal challenge, and ultimately, the customer will have to pay the price. "It will flow down to the customer. None of these companies will say they will bear the cost," he said.

India is preparing to bring Google, Facebook and Twitter under an ‘equalisation levy’

<ul><li>India’s Income Tax (IT) Department is reportedly mulling over imposing a 2% equalisation levy on <keyword id="2721952" type="PERSON" weightage="20" keywordseo="crypto">crypto</keyword> trading on exchanges based outside the country.</li><li>The equalisation levy usually applies to foreign companies operating in India.</li><li>It’s unclear how a tax usually meant for corporations will apply to traders and individuals buying crypto.</li><li>The equalisation levy may also become a bone of contention between India and G7 countries.</li></ul>Trading on <keyword id="6422582" type="UNKNOWN" weightage="20" keywordseo="Crypto-Exchanges">crypto exchanges</keyword> that aren’t based in India may get more expensive with the country’s regulator mulling over a 2% equalisation levy on crypto transactions. The new equalisation levy — a tax that India imposes on foreign companies — would apply to Bitcoins and other cryptocurrencies bought off exchanges that aren’t based in India, according to the <a href="https://economictimes.indiatimes.com/markets/cryptocurrency/equalisation-levy-could-make-life-more-taxing-for-cryptocurrency-buyers/articleshow/83733902.cms">Economic Times</a>. “The tax department is now looking into whether the 2% levy is applicable on crypto assets bought online by Indians from overseas exchanges,” the report said. <div type="Article" hostid="261" msid="83742929" title="There’s a new Indian crypto lobby in the making and Zebpay has confirmed its participation" mstype="2" mssubtype="0"></div> How will crypto traders be affected by the new tax? It is unclear why <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrency</a> traders will be affected by this. "The way the new equalisation levy is worded and defined, it appears that it will also be applicable on <keyword id="6357017" type="DEFINITION" weightage="20" keywordseo="cryptocurrency">cryptocurrency</keyword> bought from an exchange not based in India," Girish Vanvari, founder of tax advisory firm Transaction Square, told The Economic Times. However, this doesn't clarify why a tax meant for companies will mean for individuals with cryptocurrency holdings. It is also unclear as to whether cryptocurrencies can be categorised as goods, services or commodities. At the moment, individuals in India don’t pay tax on incomes from crypto trading unless they have converted Bitcoins, Ethers and respective tokens into the Indian rupee. What is an equalisation levy? The equalisation levy, which is often called the ‘Google Tax’, was originally directed towards foreign tech companies doing business in India but not paying their equivalent share of taxes because its headquarters weren’t local. There has been fierce opposition by technology giants like Google and Twitter, which may have to pay <a href="https://www.moneycontrol.com/news/business/twitter-facebook-google-may-have-to-pay-higher-taxes-in-india-report-7062031.html">as much as</a> 25% more tax in the country. Some have also alleged that the tax could be against international trade laws. “The US is trying to protect its own tax base. Countries like India are not likely to accept this as being sufficient to substitute allocation of profit with the existing equalisation levy – this is minuscule compared to what we have,” Dinesh Kanabar, CEO of tax advisory firm Dhruva Advisors, <a href="https://www.moneycontrol.com/news/business/economy/india-may-not-accept-g7-digital-tax-proposal-as-equalisation-levy-generates-larger-share-of-profit-experts-say-7015881.html">told</a> Moneycontrol. The equalisation levy could also become a bone of contention between India and G7 countries. The grouping of countries has its own new digital tax that it wants to put into place. It also requires tech giants like Google, Facebook, Twitter and others to pay tax in the countries where they operate, but India’s equalisation levy would earn the country higher revenues. It has been just under two months since almost every <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto trader</a> in India had to stop making deposits to exchanges in Indian rupee. But most in the industry expect those issues to pass soon enough. However, even if they do, users in India may have to rethink their crypto-trading strategies with this new equalisation levy coming into play. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/citymall-a-startup-that-helps-budding-entrepreneurs-start-their-ventures-on-whatsapp-has-raised-over-22-million/articleshow/83741383.cms">CityMall, a startup that helps budding entrepreneurs start their ventures on WhatsApp, has raised over $22 million</a> <a href="https://www.businessinsider.in/cryptocurrency/news/investments-in-crypto-hit-17-billion-in-the-first-six-months-of-2021/articleshow/83740327.cms">Investments in crypto hit a new record of $17 billion, but Indian funds are yet to jump on the bandwagon</a> <a href="https://www.businessinsider.in/business/ecommerce/news/flipkart-and-amazon-may-not-be-able-to-do-flash-sales/articleshow/83737670.cms">Amazon, Flipkart and other e-commerce platforms may not be able to do flash sales any more, if Indian government has its way</a>

India is reportedly mulling over a new crypto tax which could make trading on foreign exchanges more expensive

Social media giant <keyword id="736869" type="COMPANY" weightage="20" keywordseo="Facebook-India">Facebook India</keyword>'s revenues grew 43 per cent year-on-year to about Rs 1,277.3 crore in 2019-20, while its net profit more than doubled to Rs 135.7 crore, as per regulatory documents. Its total income was Rs 893.4 crore in the financial year ended March 31, 2019, according to Registrar of Companies filing - shared by market intelligence firm Tofler. The net profit increased by over 107 per cent to Rs 135.7 crore in FY20 as compared to Rs 65.3 crore in the preceding fiscal, it added. When contacted, a Facebook spokesperson said India is an important market for the company. "...we are deeply committed to being an ally in the country's socio-economic transformation. We will continue to invest in our India operations while working with small and large businesses to help in their economic recovery post the pandemic," the spokesperson added. In November, tech giant Google had made a similar filing that showed its revenues from India had grown 34.8 per cent to about Rs 5,593.8 crore in 2019-20 over the previous financial year. Its net profit was higher by about 23.9 per cent at Rs 586.2 crore in FY20. Facebook India acts as a non-exclusive reseller of advertising inventory to customers in India. It also provides IT/ITeS, marketing and other support services to the Facebook group. According to the filing, Facebook's employee benefit expense grew 63.3 per cent to Rs 299.3 crore in FY20 from Rs 183.2 crore in the preceding fiscal. The company paid an equalisation levy of Rs 369.5 crore in the fiscal under review as against a payment of Rs 118.2 crore in the fiscal ended March 2019. The Indian government charges a 6 per cent equalisation tax on gross payment received by global digital companies from Indian residents for online advertising. <keyword id="45395" type="CITY" weightage="20" keywordseo="Google-India">Google India</keyword> paid an equalisation levy of Rs 611.1 crore in FY20. India is among the biggest markets for Facebook, which also operates photo-sharing platform Instagram and messaging app WhatsApp. Around 2.5 billion people globally use Facebook's family of apps daily, while there are over 10 million active advertisers across its services. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/india-desi-gps-finally-joins-china-russia-and-the-us-after-a-two-year-long-wait/articleshow/79656300.cms">India’s desi-GPS is now in the same league as the US, Russia and China — can scan 1,500 kilometres beyond its own borders</a> <a href="https://www.businessinsider.in/science/health/news/canada-has-enough-covid-19-vaccine-doses-to-cover-each-citizen-five-times-over-while-the-fate-of-67-poor-countries-remains-undecided/articleshow/79645493.cms">Canada has enough COVID-19 vaccine doses to cover each citizen five times over while the fate of 67 poor countries remains undecided</a> <a href="https://www.businessinsider.in/india/news/farmers-plan-to-block-delhi-jaipur-and-delhi-agra-highways-starting-december-12-and-start-nationwide-protests-on-december-14/articleshow/79644167.cms">Farmers call for nationwide protest on December 14 — plan to block Delhi-Jaipur and Delhi-Agra highways starting December 12</a>

Facebook India's net profit doubles in fiscal 2020 whereas Google only saw a 23.9% increase

New Delhi, The <keyword id="76562" type="COMPANY" weightage="20" keywordseo="Confederation-of-All-India-Traders">Confederation of All India Traders</keyword> (CAIT) has welcomed the <keyword id="6358021" type="COMPANY" weightage="20" keywordseo="budget">Budget</keyword> proposal to impose 2 per cent extra tax on foreign e-commerce companies whether engaged in business of <keyword id="6371194" type="UNKNOWN" weightage="20" keywordseo="sale">sale</keyword> of goods or providing services, acceptance of offer for sale, placing of purchase order, acceptance of purchase order, payment of consideration or supply of goods and services partly or wholly. As per a statement, it has also been clarified in the Budget that the tax will be applicable for consideration of sale of goods, irrespective of whether the provider owns the portal, and consideration of provisions of services irrespective of whether services are provided or facilitated by e-commerce operators. The provision has been made in the Budget by proposing amendments to Section 163 sub clause (3), Section 164 clause (cb), Section 165 sub section (3) and clause (b) of The <keyword id="6374292" type="UNKNOWN" weightage="20" keywordseo="finance-act">Finance Act</keyword>, 2016. The provision will be applicable retrospectively with effect from April 1, 2020. All such foreign companies which are engaged in sale of goods or providing services through any online mode will come under the purview of this provision and will have to pay 2 per cent extra w.e.f. from April 1, 2020. It's a bold step taken by the government which has been heartily welcomed by the traders across the country, CAIT said. National president of CAIT, B.C. Bhartia, and secretary general, Praveen Khandelwal, while appreciating the move, said that the proposal expands the definition of "online sale of goods" and "online provision of services", thereby eliminating all confusions regarding what could be the true definition of e-commerce in <keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword>. CAIT has welcomed the conceptual construct of this provision even as it studies its fine print. The provision amply reflects the intent of the government to crackdown on the the unholy business practices of global e-trailers to monopolise and control Indian e-commerce and retail trade, CAIt said . Bhartia and Khandelwal informed that the introduction of equalisation levy is meant to create a level playing field and to prevent circumvention of tax laws on the digital transactions. The Organisation for Economic Co-operation and Development (OECD) and the United Nations are also9 working on the issue, as there is a global consensus on bringing a mechanism to tax the digital economy adequately. Though equalisation levy in India has undergone changes in 2020 from its introduction in 2016, certain changes have been introduced vide the <keyword id="123776" type="ORGANIZATION" weightage="20" keywordseo="Finance-Bill">Finance Bill</keyword>, 2021 SEE ALSO: <a href="https://www.businessinsider.in/business/news/mukesh-ambani-ratan-tata-and-anand-mahindra-might-come-together-for-indias-new-national-hydrogen-mission/articleshow/80645570.cms">Mukesh Ambani, Ratan Tata, and Anand Mahindra might come together for India’s new National Hydrogen Mission</a> <a href="https://www.businessinsider.in/stock-market/news/indigo-paints-shares-listed-at-2607-which-is-at-75-premium-to-the-set-price-band-at-1488-1490-per-share/articleshow/80643645.cms">India’s fifth-largest paint maker Indigo Paints IPO lists at 75% premium over the issue price</a>

Amazon, Flipkart, Microsoft to pay 2% extra tax now

<ul><li>The Indian government may ask foreign crypto exchanges to pay 18% Goods and Services Tax (GST) on transactions with its citizens.</li><li>For local crypto exchanges, the 18% tax is usually built into the trading fee charged to customers — akin to how brokerages change conventional stock trading.</li><li>India was also reportedly mulling over charging a 2% equalisation levy on transactions with foreign crypto exchanges earlier this month.</li></ul>With the Indian government mulling over new laws to regulate <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">cryptocurrencies</a> in the country, the indirect tax department is looking into whether overseas exchanges need to pay the Goods and Service Tax (GST) at 18%. The 18% slab is meant for capital goods and industrial intermediaries, among other times, while the highest slab of 28% applies to luxury goods, like automobiles. It’s the same as the tax on brokerage with trading in conventional shares on the stock market. Indian <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">crypto exchanges</a> already charge their users GST. The tax is built into the trading fee that exchanges add to the buying price of Bitcoin, Ethereum and more. The exchanges pay GST to the government as part of their general tax payments. However, crypto exchanges based outside of India are currently curtailing paying these taxes, according to the Economic Times (<a href="https://economictimes.indiatimes.com/tech/tech-bytes/crypto-tax-overseas-crypto-exchanges-may-face-18-additional-gst-in-india/articleshow/84045569.cms">ET</a>). And, in order to bring them under the tax umbrella, the Indian government could categorise overseas crypto exchanges with Indian users as Online Information Database Access and Retrieval (<a href="https://www.cbic.gov.in/resources//htdocs-cbec/gst/OIDAR.pdf;jsessionid=387EC0A82F9E043A07073C92159199EB">OIDAR</a>) services. What is OIDAR? OIDAR rules <a href="https://www.cbic.gov.in/resources//htdocs-cbec/gst/OIDAR.pdf;jsessionid=387EC0A82F9E043A07073C92159199EB">state</a> that any digital or data service provided to Indians or people based in India should be taxed, even if there’s no physical interface. This way the supplier of a service from a non-taxable territory can be liable for GST payments. The government justifies the tax as a way of leveling the playing field. If a service is being provided by local players, and by overseas players, one should not be paying more tax than the other. “The overseas suppliers of such services would have an unfair tax advantage should the services provided by them be left out of the tax net,” says the government circular. The only thing that is required for the law to come into effect is that the ‘subject’ of the supply — that is, the consumer — should be located in India. Questions still unanswered While it may make sense to have local and overseas crypto exchanges on the same level, there is still an ongoing debate over whether cryptocurrencies are a financial asset, security or a currency. It’s also unclear whether the 18% GST slab will be applicable to all transactions or only on the margins. Right now, the 18% GST charged by conventional brokerages is only on the margins or the commission taken by the company — not the entire transaction. A report from last month had also argued that exchanges outside the country may be subject to a <a href="https://wazirx.com/signup?invite=2kpah6gr&amp;utm_source=business-insider&amp;utm_medium=referral&amp;utm_campaign=microsite">2% equalisation levy</a> as well, which would raise the price of cryptocurrency for Indian buyers. This tax is meant to have foreign entities doing business in India pay tax to the country, instead of only paying in their home countries. The race to bring in taxes for cryptocurrencies comes after the industry saw a boom of interest during the pandemic. Bitcoin hit an all time high earlier this year behind the fear, uncertainty and doubt (FUD) about its future in India. Several ministers have mentioned the fact that cryptocurrencies do not fall under any regulatory purview. In February, Minister of State for Finance and Corporate Affairs, Anurag Thakur, had <a href="https://www.businesstoday.in/latest/corporate/story/cryptocurrencies-are-neither-currency-nor-commodity-will-bring-bill-soon-anurag-thakur-287072-2021-02-09">said</a> that neither the Reserve Bank of India (RBI) nor the Securities and Exchange Board of India (SEBI), have regulatory oversight over these assets, since they aren’t issued by an identifiable user. This means that tomorrow if there is a scam or huge loss of wealth, these authorities may not be able to do much about it since the nature of cryptocurrencies is still undefined — akin to the conundrum <a href="https://www.businessinsider.in/cryptocurrency/news/south-africas-4-billion-in-crypto-scams-has-regulators-scrambling-to-bring-in-new-regulations-within-the-next-three-to-six-months/articleshow/84015957.cms">South African financial authorities are currently facing</a> after the largest crypto heist in history. A solution for this could be to classify crypto as an asset class, which would put it under the purview of various authorities — an idea that other central banks and authorities have also been <a href="https://www.businessinsider.in/cryptocurrency/news/south-korea-is-open-to-cryptocurrencies-and-making-an-effort-to-regulate-them/articleshow/83986459.cms">exploring</a>. <a href="https://forum.businessinsider.in/">For a more in-depth discussion, come on over to Business Insider Cryptosphere</a> — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve. SEE ALSO: <a href="https://www.businessinsider.in/tech/apps/news/google-is-working-on-a-new-app-to-let-you-store-your-medical-records/articleshow/84059948.cms">Google is working on a new app to let you store your medical records</a> <a href="https://www.businessinsider.in/tech/apps/news/battlegrounds-mobile-india-official-download-link-how-to-update-bgmi-rewards/articleshow/84058116.cms">Battlegrounds Mobile India launched officially – here’s how to update, claim rewards and more</a> <a href="https://www.businessinsider.in/business/startups/news/failure-to-pivot-covid-19-blues-force-amazon-backed-shuttl-to-look-for-a-buyer/articleshow/84056797.cms">Failure to pivot, COVID-19 blues force Amazon-backed Shuttl to look for a buyer</a>

Foreign crypto exchanges in India may have to pay 18% GST as the government mulls over taxation

By Lalit K Jha Washington, Feb 1 (PTI) American companies having a foothold in India and those planning to expand their business in the fastest growing economy of the world expect "tax parity" in the annual budget to be tabled by Finance Minister Nirmala Sitharaman, the head of a top India-centric US business advocacy group said. Mukesh Aghi, president, US India Strategic and Partnership Forum (USISPF) said the American companies have high expectations from what Sitharaman would present in her fourth annual budget on Tuesday. The US companies, he noted, are very keen on investing in India as they believe that the fundamentals of the economy remain strong in the country, offer a big market and they would like to diversify given the Chinese risk factor. "They (US companies) are looking at tax parity. For example, e-commerce companies that have equalisation levy, that needs to be done away with. They are looking at lowering of tariffs. It is good for India also because domestic companies become much more competitive and efficient," he told PTI in an interview on Monday. American companies, Aghi said, are looking at more investment in India's infrastructure. They also want the labour laws and land acquisition process streamlined, he observed. "Because ease-of-doing business is still very critical in the minds of these investors. They spent a lot of time putting in an application for more land or water so that has to be sorted out," he said. The USISPF chief further said the US companies, from a long-term perspective, expect from the annual budget "a sense of predictability, transparency and concentrated process". These are the critical questions raised inside a boardroom when a company is planning to invest million or billions in India, he added. "I think it is important that the tax regime, for example, do not behave like tax terrorism, but behave more like tax partners. If you look at any US company at the moment, there will be some kind of tax issues with the authorities," he said in response to a question. Aghi added that it is important that corporate taxes are in line from a global perspective. They do not have extra taxes, which makes these companies' cost of manufacturing itself more expensive, he said. He said Sitharaman has been transparent and her confidence has gone up in handling the economy and the budget itself. Asked about the expectations of Indian Americans from the budget, Aghi said certain reforms in the regulations and taxations related to start-ups in India would help them create a better atmosphere and bring in more investment from the diaspora. "What we are seeing is more and more Indian Americans are funding startups," he said, noting that India produced 44 unicorns last year and there are over 10,000 startups blossoming in India. "It is important to allow these startups to list in the US as the capital and access is much easily available in the US, so valuation gets better," he said, adding that taxation reform is essential on options granted to employees. An early taxation on such options makes it less attractive, he argued. "India has a tremendous success story of startups. It is the third largest ecosystem in the world. That shows the zeal and the spirit of entrepreneurs in India….. they are willing to go out into an environment in which they can get better. "At the end of day, startups are job creators, and they are innovators. The combination is critical for India to sustain 8.5 to 9 per cent economic growth for the next 10-15 years," Aghi added. PTI LKJ SRY

You Searched For "equalisation levy" and got 13 results

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