In order to levy the new 2 per cent charge on foreign e-commerce companies making digital transactions in India, the IT department has made changes in the digital tax form, challan ITNS 285 which is used for the paying equalisation levy.
The new levy has been in effect from April 1 after being introduced in the Union budget and its first instalment payment is due on July 7. The updated form includes ‘e-commerce operator for e-commerce supply or services’ under the type of deductor category and permanent account number of PAN of the deductor or the e-commerce company that has been sought. The most important change has been the availability of ‘Outside India’ option for sought address details that will let foreign companies to key in details and make the payment due. While experts have expressed some major concerns on the new levy.
One of the matter experts, Sandeep Jhunjhunwala Partner, Nangia Andersen LLP, said, “This has rather imposed a burdensome and challenging task for non-resident e-commerce players to apply for and obtain PAN within 1 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”.
“Detailed FAQs will provide much-needed clarity and time to taxpayers, to better understand their obligations, proceed with determining the appropriate amount of tax payable by them, and ensure due to compliances. However, the rushed move could cause substantial challenges in discharging first payment liability, in case of interest, penalty and potential litigation for delayed payments are to be avoided”, added Nangia Andersen LLP.