PAN Card: The government mandates that foreign companies running e-commerce platforms in India must have a PAN
“An e-commerce operator will be a “non-resident who owns, operates or manages any digital or electronic facility or platform for the online sale of goods or the online provision of services, or both,” the CBDT said in the on Thursday issued notice.
The change was notified by the Central Board of Direct Taxes (CBDT) when it amended the 2016 Countervailing Tax Rules to include e-commerce operators as those liable to pay the countervailing tax and for various procedural, regulatory compliances related to the submission of tax refunds together with reminders and filing of appeals.
CBDT has also modified existing forms to create separate sections for reporting levy payments by e-commerce operators. The changes also include the option to enter Aadhaar instead of PAN when submitting details.
“The government had levied a 2% tax on the sale of goods or the supply of services by a non-resident e-commerce operator in the FY21 budget.”
The changes were made to align the financial statements and forms with the new e-commerce offset levy that was introduced earlier this fiscal year, experts said.
“The Annual Declaration and Objection Documents also require providing the PAN/Aadhar of non-residents, reinforcing the view that non-resident e-commerce businesses may need to obtain a PAN in India,” Sandeep Jhunjhunwala, Partner at Nangia Andersen LLP.
An electronic verification code for the person who verifies the annual accounts has also been introduced.
The challans for the payment of the e-commerce equalization levy were notified in July 2020 and requested that a PAN and Indian bank account be provided to transfer the levy.
“The Appeals Forms communicated, both to the Commissioner (Appeals) and to the Tribunal, provide for an indication of the amount of the disputed compensatory levy, which is not consistent with the existing limited appeals issue, but only for the penalty in the event of non-payment of the countervailing levy, and not for the countervailing levy imposed by the tax officer,” noted Jhunjhunwala.
E-commerce operators have been brought within the scope of the countervailing levy as a result of the Finance Act 2020. The government had levied a 2% tax on the sale of goods or the provision of services by a non-resident e-commerce operator in the FY21 budget.
Aside from the consequential changes, the scope of tax authorities’ rights to establish standards and procedures to ensure secure collection and transmission of data when filing various forms has been expanded, said Divakar Vijayasarathy, a partner at tax advisory firm DVS Advisors LLP.
Experts added that e-commerce companies are still seeking clarity from the government on the implementation, applicability and calculation of the levy.
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