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India changes digital tax form to include new levy on foreign e-commerce

India changes digital tax form to include new levy on foreign e-commerce

The income-tax department has introduced changes to the form used to pay equalisation levy, to include the option of paying up the new 2% levy on digital transactions conducted in India by foreign e-commerce companies.

The new levy was introduced in the Union Budget and was made effective from April 1, with the first instalment payment due on July 7.

The IT department has amended the challan ITNS 285 – which is used to pay the levy – through an online mechanism. The changes now include ‘e-commerce operator for e-commerce supply or services’ under type of deductor category, and permanent account number of PAN of the deductor or the e-commerce company has been sought.

Importantly, the modified challan provides for 'Outside India' option while seeking the address details of the payee, enabling foreign companies to key in details and make the payment due.

The move comes as government authorities stood their ground on implementation of the new levy, even as the United States has opened an investigation into evaluating whether the digital taxes imposed by India and nine other countries, discriminates against US-based companies.

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