CBDT issues new guidelines to streamline digital economy tax

09 Feb 2023 Livemintadmin

The Central Board of Direct Taxes (CBDT) has issued norms for processing returns filed by digital economy firms that are liable to equalization levy, streamlining the administration of India’s digital economy tax.

The Centralized Processing of Equalization Levy Statement Scheme, 2023, which is effective from Tuesday, sets the modalities for processing the returns filed by these entities.

The equalization levy was introduced in 2016 on online advertisements and later expanded to cover the sale of goods and provision of services through e-platforms.

While online advertising services rendered by offshore entities are taxed at 6%, e-commerce supplies by non-resident firms are taxed at 2%.

Experts said that the scheme was long awaited as there was no procedure for processing of equalization levy statements so far, which had created some uncertainty, especially regarding refund claims made.

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