Section 167 of Finance Act-Furnishing of statement (Return Filing):
Every assessee or e c-commerce operator has to file return in form.no.1 or before 30th June of immediately following financial year.
Belated/ Revised return: If or e- commerce operator assessee has not furnished the return within time limit or furnished return within time, noticed any mistake, may revised return. Such belated return or revised return has to be furnished within 2 years from the end of financial year in which specified service was provided, or E- commerce supply or service was made or provided or facilitated.
If assesee or e commerce operator fails to furnish the statement within prescribed time, the assessing officer may serve a notice upon such assessee requiring him to furnish the statement. If assessing officer issue notice then assessee has to file return within 30 days from the date of serving of such notice.
Section 168 of Finance Act 2016- Processing of Return i.e Intimation:
Where a Statement has been made undersection 167 by the assessee or e- commerce operator such statement shall be processed u/s 168. In processing if there is an arithmetical error then it has to be rectified. After processing assessing officer will issue intimation specifying sum payable or refunded to assessee or e commerce operator. Intimation has to be sent within 1 years form the end of the financial year in which the return was filed.
If any interest, levy, penalty is payable then notice of demand in Form No-2 has to be served upon assessee or e commerce operator. If any demand arises due to processing of return then intimation it self is treated as deemed to be demand notice.
Section of Finance Act 2016: Rectification of Mistake:
If there is any mistake apparent on record then assessing officer may amend such intimation on Suo-moto or mistake brought to notice be assessee or e- commerce operator . Intimation can amended within one years from the end of Financial year in which intimation sought to be amended was issued.
Section of Finance Act 2016:Penalty for late filing Return
If assessee or e- commerce operator fails to file return up to 30th June within 30 days from the date of service of Notice by assessing officer then penalty of Rs: 100 per day during which failure continue.
Section 171 of Finance Act 2016: Penalty for failure to deduct or pay equalisation levy:
Any assessee or e-commerce operator who-
- Fails to deduct the whole or any part of the equalisation levy as required under section 166 or
- Fails to pay the whole or any part of the equalisation levy as required under section 166A or
- Having deducted the equalisation levy referred in section 165, fails to pay such levy to the credit of the Central Govt. in accordance with the provisions shall be liable to pay,
- In case of referred to in clause in 1, in addition to paying the levy, or interest, if any in accordance with the provisions of section 170, a penalty equal to the amount of equalisation levy that he failed to deduct
- In the case referred to in clause 2 in addition to the levy, or interest, if any, in accordance with the provisions of section, 170, a penalty equal to the amount of equalisation levy that he failed to pay and
- In the case referred to clause 3, in addition to paying the levy and interest in accordance with the provisions of section 170, a penalty of one thousand rupees for every day during which the failure continues, so however, that the penalty under this clause shall not exceed the amount of equalisation levy that he failed to pay.
Non compliance of the provision of equalisation levy:
Any consideration paid/payable to Non- resident for which equalisation levy is deductible and if
- Such levy has not been deducted,
- Levy deducted but not paid to govt up to due date of return filing then such advertisement expenses , shall not be allowed as deduction in current previous year
Note: If equalisation levy deducted in subsequent year or deducted in previous year but paid after due date of return filing then such sum shall be allowed as deduction in the previous year in which levy has been paid of govt.
Income Exempt From Tax:
Any income arising from any specified service provided on or after the date on which the provisions of Chapter VIII of the Finance Act, 2016 comes into force or arising from any e- commerce supply or services mode or provided or facilitated on or after the 1st day of April, 2020 and chargeable to equalisation levy under that chapter shall be exempt.
Example:
Santosh & co paid Rs: 4,00,000 to Facebook then Santosh & co required to deduct equalisation levy @6% remit, 3,76,000 to Facebook Rs:4,00,000 shall be allowed to Santosh &co if it deduct levy & paid to Govt up to due date of Return of Income, As per section 10(50) amount of Rs:4,00,000 shall be exempt in hands of Facebook.
Example:
Let us Buy web is online portal own by US based company. It provides online market place for good and service and mainly target Indian and Asian Customers. Generally sale proceds are collected by lets Buy and after deduction of commssion remmitted to supplier.Following details for previous year 2021-22
Goods sold/services provided to person resident in India or the person using IP address in India 20 crores.
Services provided to Santosh & co resident in India by way of Online advertisement:Rs:10,00,000
Goods sold/ service provided to Non-resident -70 crores
Discuss the tax implication in hands of Lets Buy in India in relation to above tractions.
Case-1
In this case equalisation levy is not applicable and company require to pay tax as per normal provision of It Act.
Case: 2 Lets buy does not have a Permanent Establishment in India
In this case equalisation levy is applicable
- Lets buy required to pay equalisation levy u/s 165A @2% of 20 crore to govt. i.e 40 lakhs.
- For online advertisement Santosh & co required to deduct equalisation levy @ 6% of 10 lakhs i.e 60,000.
